The value of claims submitted has risen because repairs and replacements have become more expensive, companies say. And natural disasters make things worse.
Hobbs, who lives near the northern shore of Louisiana’s Lake Pontchartrain, said the cost of her auto coverage jumped almost 30 percent this year when State Farm added hundreds of dollars to her annual premium, raising it to $1,806. “I’m not going to go hungry or homeless, but like everybody else I live on a budget, and when that budget gets interrupted, it’s difficult,” said Hobbs, 56, who works as a communications manager at a paper mill.
But the rate hikes are also an attempt by insurers to make up for big payouts driven by floods and natural disasters, which insurers categorize as “catastrophe losses.” States prone to climate disasters have seen some of the steepest auto-rate hikes.percent since last July as blizzards, tornadoes and hailstorms have led to an increased number of claims throughout the state.
State Farm spokesman Justin Tomczak did not address Hobbs’ account specifically, but said car insurance premiums in Louisiana are expected to increase by about 17.7 percent in 2023, for both new and existing customers. Higher premiums in Louisiana and elsewhere are driven by inflationary pressures, supply chain issues and higher claim costs, he said.“We continue to adjust to these trends to make sure we are matching price to risk,” Tomczak said in an email.
” in Allstate for raising rates 40 percent. In May, Gov. Brian Kemp passed a law that gave state insurance regulators more control over prices.But regulators have to tread a fine line between controlling costs and driving away insurers. Some insurance companies are abandoning parts of the Southeast, leaving drivers with few options. Farmers Insurance recently suspended new policies in California, Louisiana and Florida, for example.
“If you have a blue-collar job, or if you only have a high school degree, a number of companies will charge you more than if you’re a white-collar professional,” Heller said. “Everybody’s facing rate hikes, but a greater share is borne by lower income drivers.”Families also often face a heavier financial burden, especially when all adults in a household, along with teenage children, need transportation to work.
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