Of course not, but politicians want them. What’s the real problem and solution?
Runaway Insurance Costs Bring Back Talk of Price Caps
Rate caps have moved to the forefront. The Wall Street Journal reports Runaway Insurance Costs Bring Back Talk of Price Caps
Illinois lawmakers are considering a ban on home insurers hiking rates because of catastrophes in other states. Louisiana recently handed its regulator the power to strike down “excessive” premiums.
New York lawmakers are investigating soaring home-insurance costs, with a view to potential new curbs. In Michigan, Democratic lawmakers this summer proposed a law to impose a 10% cut in auto-insurance rates.
“Rate increases are top of mind for every policymaker across the country. Consumers are going to them and saying, ‘I can’t deal with a 30% rate increase, or a 40% rate increase’,” said Jon Godfread, president of the National Association of Insurance Commissioners.
“The increases are so big—you just think ‘wow, what’s going on’,” said Jarrad McCarthy, a Chicago sales executive. In the past two years, the annual cost of insuring his three-bedroom home has increased 47%, from $1,312 to $1,929.
Coverage for his Hyundai Tucson has gone up even more: The six-month premium jumped 62%, from $584 in June 2023 to $946 this summer.
Some lawmakers see rate controls as the answer. Illinois Democratic Gov. JB Pritzker backed the state gaining a veto over price increases this summer, after lashing out at an “unfair and arbitrary” 27% hike in home-insurance rates by State Farm.
California for decades had an effective 6.9% ceiling on premium increases. That kept its home-insurance rates below the national average, despite pricey real estate and vulnerability to wildfires.
But a pullback by major home insurers has plunged the market into crisis. To try to woo them back, regulators in recent months greenlighted double-digit home-insurance rate increases far in excess of the historic norm.
“I may be criticized and dragged through the mud for it…but I don’t care,” Insurance Commissioner Ricardo Lara said, after backing a 17% increase for State Farm. “We can’t just talk about affordability without first addressing availability. You can’t afford what doesn’t exist.”
Disaster-prone Louisiana last year axed a requirement for rate increases to be approved by regulators, to try to attract more insurers to the state, only to this year impose fresh controls. A new law allows regulators to strike down any “excessive” rate—defined as one likely to produce unreasonably high profits—and even demand refunds from insurers.
You Can’t Afford What Doesn’t Exist
Insurers leave states when caps and regulators don’t permit risk based prices. California is proof enough.
And insurers distribute costs elsewhere. Causing what the hell reactions from homeowners.
Price Caps Not the Answer
Price caps are not the answer because they cause two distortions.
- Unavailability of insurance at any price in some places
- Rising costs in other places to make up for losses
What’s the Real Problem?
- The price of homes has soared.
- The price of labor has soared.
- The price of materials to make repairs has soared.
In a single word, the real problem is inflation, not price gouging, not fires, not hurricanes, not climate.
Nonsensical BLS Chart
The BLS says the cost of homeowners insurance index has risen form 151 to 165 since January of 2020.
That’s an increase of 9.3 percent.
The minimum increase, in only four states (Alaska, West Virginia, Vermont, and Maine) is 19-25 percent.
The average increase is on the order of 50-75 percent and much higher for anyone in a flood zone, hurricane zone, or fire zone.
Not Inflation?
That’s what the Fed thinks and foolish economists think. Neither home prices nor insurance prices nor property taxes are in the CPI.
Pea-brain economists call all of these things capital expenses not consumer expenses as if they don’t matter.
Excellent Reader Comment
I’m outspoke on the hidden costs of tariffs. For decades China was coming on with more and more cheap replacement car parts. That has largely played out.
Even worse there’s stiff tariffs happening to those parts. Goodbye cheap repairs!
Trump’s tariffs and made-in-the-US policy are driving up the cost of everything.
Is Homeowners Insurance Understated in the CPI?
The CPI is fatally broken as a measure of inflation.
Thus, all this talk about falling inflation by Trump and others is idiotic.
I discussed this on August 11, 2025, in Is Homeowners Insurance Understated in the CPI? Shop Around!
Our Insurance went up by $2,000. Then another $2,000. Here’s our story.
But look on the bright side, Trump Says There Is ‘Virtually No Inflation.’
What to Do About Inflation?
- Throw away the CPI and PCE as nonsensical measures of inflation
- Revamp the CPI and PCE incorporating property taxes and the true cost of homeowners’ insurance.
- Tell everyone the truth.
- Admit we have a spending problem in Congress
- Admit we have an executive promoting spending problems in Congress
- Admit we have a Fed problem papering over the Congressional spending problems
Q: But we are not going to do any of those things are we?
A: Of course not.
Expect more lies from Congress, from Trump, from the Fed, and from economists all of whom are ignorant about inflation.
Gold and Silver Get the Message
Please note India’s Largest Metals Refinery Ran Out of Silver for the First Time in History
- Shortages hit London too. The silver market is broken.
Also note Zero Progress on the Reducing the Deficit Despite Tariff Revenue
For fiscal year 2025, the deficit is $1.8 trillion, similar to 2024.
Looking ahead, don’t forget to tack on Obamacare subsides because there will be a deal. Also factor in Trump’s “Golden Dome Defense Shield for America”.
And who the hell knows what Trump is going to get us into in Venezuela, Afghanistan, or Gaza.
Finally, none of these long-term budget projections factor in a recession, ever.
Finally, please note Gold Surges $100 to New Record High Above $4,300 as Bond Yields Dive
Gold reiterates its message: Spending is out of control with no faith in the Fed.
Gold and silver do not believe the Fed, Congress, Trump, or anyone else will address the problems. And neither do I.
Heck, none of the above even understand inflation at all.
From a previous post and very relevant.
“If Trump is surrounded by idiots, then how would you describe Biden’s advisors?”
What difference does it make?
Who is running the country now?
Comments like the above may be accurate but they are irrelevant and evidence of your efforts to defend Trump by any means, deflecting blame.
That’s how “establishment conservative” pied pipers turn conservatives into cuckservatives: by dumbing people down into accepting”at least it’s not [x]” as an answer.
Same shit on the fake left. In 2008, Palin’s Couric interview was a deal breaker for anyone with a brain. (A VP candidate that bad disqualifies the primary candidate, in the opinion of many at the time.) Palin sounded smarter then than Kamala now.
Neither candidate should’ve gotten any votes. But we got the thugs we got. It’s appropriate to criticize the thugs currently playing the game.
Beyond that, everyone needs to start meeting their neighbours — all of them (D’s and R’s) — and figure out how you’re going to solve the nation’s problems. Because no national political group will save you.
It’s amusing to me how you think that voting within an easily propagandized, attention deficit, political idiocracy where people aren’t taught the learned skill of critical thought and analysis or have any deep concept of the contents and intent of our LONG compromised Constitution will have anything but a slight delaying effect on the decline of our country. BTW, I am definitely not a “he’s our savior” fanatical fan of egomaniac Donald, but he won by only 1.6% of the popular vote against the clown show duo and as the 2014 Princeton study showed, voter control is mostly a myth anyway:
“Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens” analyzed extensive data, comparing nearly 1,800 U.S. policies enacted between 1981 and 2002 with the expressed preferences of average and affluent Americans as well as special interest groups. The resulting data empirically verifies that U.S. policies are determined by the economic elite.
Here’s a great column from 17 years ago. As as former, very politically active libertarian back in the mid-90s, I was warning people about this. I say “former” because back then I ignorantly believed in a voting population unlike the reality I described above AND in the power of the vote. I now have the George Carlin opinion of our political system and voting.
Plumbing the Depths
How the Gears Turn
Fred Reed • March 9, 2008
(This first appeared in shorter form in The American Conservative)
https://www.unz.com/freed/plumbing-the-depths-386/
Common delusions notwithstanding, the United States, I submit, is not a democracy—by which is meant a system in which the will of the people prevails. Rather it is a curious mechanism artfully designed to circumvent the will of the people while appearing to be democratic. Several mechanisms accomplish this.
+1
But I think there’s some miscommunication here. I’ve only said what’s necessary. Not that it’s attainable. I am very skeptical of anything improving, because we “can’t fix stupid”. 98% of voters voted for incompetent or horrible people. They re-elected Dubya, Obama, and now Trump.
A third party that slows government spending growth.
The old “I’m an idiot who votes for idiots but so are you!” argument.
It makes an enormous difference, Mish, because it shows the absurdity of calling ALL of Trump’s advisors IDIOTS!
They’re not a bunch of idiots. They’re simply pursuing their party’s goals & policies just like Biden’s advisors did. America’s problem is that we live in a fairly evenly divided country, so anything the other side does, we “choose” to call them idiots which is Trump like hyperbole. What’s really happening is that we don’t like their policies which doesn’t, in general, make them idiots.
So basically, anyone who doesn’t share your opinions / policies is an idiot. Does that sound right?
If you would have read Mish’ posts then you would know how wrong this is. He has called out people in power regardless of party affiliation, always with source reference and clear explanation of his opinion.
Trump is an idiot with an uncanny talent for marketing and an absence of shame. That was obvious in his first term (injecting bleach to fight COVID anyone?), and it is even more obvious now. Also, he is an insurrectionist as anyone saw on Jan 6 2021.
Neil, apparently you didn’t read my post. I could care less that he derided Biden just like he does Trump. That’s not the point. The point is that Mish thinks anyone who disagrees with him and certainly Trump is an idiot or “economically illiterate”.
Trump actually is though, so I don’t get how you make that leap
We will just have to agree to disagree.
IMHO, Trump isn’t an idiot. Just because you don’t like his policies doesn’t make him an idiot,
America has been living through a slow liberalization of our country over the last 60 years. I don’t know what your politics are, but my guess is you’re not conservative.
Trump & his administration are trying to change that 50 years of scope creep in 4 years or maybe 8, if Vance wins in 2028.
I didn’t like Biden, but I wouldn’t call him an idiot. Rather, he had dementia. Even then people who ran the country weren’t idiots. Rather, they have different social & political views that me.
An idiot suggests you have no idea what you’re doing. Biden’s people & Trumps know exactly what they’re doing.
Just say he’s got bad policies, okay? That’s less hyperbole.
“America’s problem is that we live in a fairly evenly divided country”
No, there are a modest number of fanatics on both the “right” and the “left” who amplify their party’s nonsense to an ear piercing level. The majority doesn’t give 2 fucks about what they have to say and wishes they would just shut up and go away.
Fair point. But, when the other 45-48% don’t agree with their counter parts to any great extent, then this is a big problem as well.
Well there are a lot of idiots around Trump. Start with Hegseth. General Kellogg. Pam Bondi.
Sure, dude, sure.
trump himself is the idiot.
Jan 6, 2021 is not going away!
It’s rapidly fading from the independents’ memory as it should.
For the rest of use, we realize it was the biggest Dem psyop / setup America has ever seen.
That comment you quoted is classic bullshit “what-aboutism”. This is why voters settle for someone who clearly doesn’t have their best interest in mind.
I view Biden as passively bad while Trump is actively bad. I view the spending problem a little differently than you do. We have a problem of tax cuts without spending cuts. If a party is going to cut taxes, then cut the spending along with it. You can’t expect the other party to cut spending to make up for your tax cuts just like you can’t expect the other party to vote for immigration amnesty to make up for lack of immigration enforcement.
Many unfortunate outcomes such as the loss of skilled manufacturing and the widening income gap are structural features of our economy and not really the result of any one party’s policies. They are the result of our fiat reserve currency and a federal reserve that is more concerned with preventing real wage growth and keeping capital costs low.
Politicians don’t get elected/reelected by promising to cut benefits or services.
Way back in the old days people talked about a Balanced Budget Amendment. At the time it was the only thing that would have prevented our “The time bomb in ticking louder every day” economy, as we accelerate into the black hole of devaluation and collapse.
Auto insurance rates increased 54% from 2020 to 2024. My condo insurances rates increased dramatically during this time as well, especially in 2022. You may blame Covid, or Biden, but blaming Trump and his tariffs for a trend that has been occurring for the last several years is evidence of your lack of objectivity.
Ah yes – Another Trump fan who cannot read.
I have been blaming both parties for decades.
The party in power gets the biggest focus,
Who is that?
Trump was elected on a platform of reducing inflation.
What has he done other than increase them with more deficit spending, inane tariffs, restoring breaks for New Yorkers, government meddling everywhere, while threatening Massie and Rand Paul, and any other Republican who stands for fiscal sanity.
Is spending $300 million to build a new ballroom adjacent to the White House inflationary? It’s paid for by private interests. What are these interests? I think, it’s a necessary project. The Academy Awards could be held there. It’s a good plan. Where do I get an invitation.
On the one hand, deporting illegals raises the cost of a new roof (and homeowners insurance). On the other hand, deporting illegals should lower the cost of car insurance. Conductores borrachos.
In my neck of the woods assorted middlemen harness the cheap labor marking it up to where the cost of the roof is no cheaper to the ultimate consumer
Argentina reverts to trend–good money after bad
Supporting the insupportable
….The Argentine peso has fallen below the level it reached before the US Treasury began purchases earlier this month, in a sign the Trump administration’s financial support is failing to halt the currency’s slide ahead of a crucial election for libertarian President Javier Milei. The peso dropped almost 1 per cent on Monday to close at 1,477 against the dollar, a new record low, near the bottom of an exchange rate band adopted in April. The slide has resumed despite three purchases of pesos by the US Treasury since October 9 — which Argentine economists estimate total roughly $400mn, although neither government has confirmed the figure — as well as the announcement of a $20bn currency swap line between the two countries….
Bureau of Labor Statistics was too way off with its insurance inflation statistic. That deserves an investigation by the Department of Commerce Inspector General.
Auto and home insurance is the biggest ripoff. These insurance companies spend millions on advertising but deny claims. It is no different than the health insurance industry denying claims and reporting higher profits. If these industries were forced to be nonprofits, they would never have to raise rates and there would be more transparency in pricing. Instead of rate caps states should force all insurance companies to only be allowed operate as nonprofit.
The truth is some states have banned allowing nonprofits to exist in some industries to protect them. If the consumer truly knew the lengths these companies go to prevent any competition, they would understand.
Hey State Farm, only a short drive from Bloomington, Illinois to Bloomington, Indiana.
One acronym why politicians and the fed (same thing?) will never report true inflation – – COLA!
People want their homes to appreciate in value. People want their investments to go up. People want their paychecks to increase.
But while this is happening, they also want their property taxes, cost of services and genera; costs of living to be stable or decrease.
That’s an impossible incongruity!
Honestly, the only hope is for an AI to take over managing the government benevolently while deploying robot workers that don’t need to be paid.
Humans will only keep digging the hole deeper.
Put yourself in Allstate’s shoes. Why would they continue to offer insurance in CA when the chief executive of the state vetoes SB 326 when it passed unanimously from the state legislature and assembly, meaning every D and R voted for it?
SB 326 – again, every D and R voted for it – was vetoed by Newsom because fire mitigation would cost too much.
Just can’t make this crap up: https://www.gov.ca.gov/wp-content/uploads/2025/10/SB-326-Veto.pdf
Another source of this inflation: greed embedded in absurdly complex, fancy cars. China is going to win the emerging world middle class on this, while our auto industry decays.
They do this via heavy automation, which auto unions here work against, obviously.
Were the workers rewarded for the increase in productivity by reducing the 40-hour workweek yet keeping their salary the same, more paid vacation time, more paid holidays, more paid floaters instead of selfishly retaining the increase by layoffs, share buybacks, increasing dividends, rewarding management by increasing stock warrants, stock incentives, workers would be more amenable to the automation.
In the real world what you suggest is unatainable and always has been.
The real world is where workers only work hard enough to prevent getting fired and businesses only pay enough to keep their workers from quitting.
“In the real world what you suggest is unatainable and always has been.”
Wrong!
Prior to the Great Depression workers had to work 60 hours per week. The Fair Labor Standards Act reduced it to 40.
Prior to the 80s, stock buybacks were illegal.
Prior to the financialization of the US economy senior management goals were aligned with growing market share, quality of products and/or service, customer retention, increasing sales, increasing productivity instead of EPS, what Wall Street wants, crony capitalism, etc.
They actually cared about the town or city they lived in, sponsored civic events with no expectation of an ROI from volunteering to
I am still old enough to remember those days.
I can still remember when a student could go to junior college tuition free. When attending the California university system as a student the tuition per year was almost free a year till St. Reagan became governor then went up to $300 a year to attend any university or college in UC system.
Today, it requires going into debt paying off a loan that takes 10 or more years to payoff.
Your statement reminds me of the aphorism about how to boil a frog, slowly at first then gradually raise the heat. In other words you’ve become so inured to your situation that you think it is the way it is and it has been this way all along.
It hasn’t. The top 1% want you to think so.
Workers only get rewarded in communist economies!
Au contraire, state capitalism, i.e., similar to the USSR, Cuba, N. Korea, etc., do not reward workers. In fact, the wealth in the aforesaid worker’s paradise countries were or are transferred to their elites as well.
W. Europe, Nordic, US regulated capitalism post WW II did till the early 70s for the former and latter. Nordic countries from the golden age till today have fared better.
BLS says inflation has been 26% over the last 5 years.
Then why is everything 40-50% higher priced?
I noticed in a lot of areas of the country property taxes have not kept up with inflation yet. Increases are coming to those lagging areas.
Social Security has increased by only 21.6% since 2020:
The problem with state review of insurance rates is that the insurance commissioners cannot review the rates and give approval fast enough even if they were “justifiable” increases. The best solution is to have a lot of competition. If rates get high more companies will jump into the market for the profit. Insurance commissioners should make certain that there is no collusion between insurance companies and review contract terms and conditions.
My homeowners insurance will most likely be canceled this year in California because State Farm cannot raise my rates enough. I would rather pay double to State Farm than quadruple to the California State “Fair” Plan.
The reason for auto and home rate increases are indeed multifarious so one solution will not fix it.
The US insurance system is a rentier sector. It doesn’t add to productivity for its customers. It gambles on investments through equity, bond, and derivatives markets. If markets are up they are profitable. If they make bad bets, e.g., AIG just prior to the GFC they should’ve went bankrupt had not the Bernanke’s FED illegally bailed them out to back door their real client, the banking industry
The insurance industry regulators have been captured by the industry. It is also an oligopoly.
The consumer has been ill served by the industry through the latter’s machinations of delaying legitimate claims through lawfare then the consumer capitulates because they can’t wait out the insurer.
Insurance is too important to be left to oligarchs providing a necessary service to the economy.
The answer is the people will go without insurance. It will just be the way it is.
they can’t. you’re required to carry home insurance by lenders and you’re required to carry car insurance by most states.
I live in MI which has the highest auto insurance rates in the US because of the no fault law. They changed that so you could have the option of opting out of the extensive coverage it provides, like full medical and disability payments. Anyway, auto insurance is still priced based on your driving record so the worse you are the more you pay. Home insurance still is reasonable. I don’t know how insurance companies can charge higher house insurance rates in states or areas that have low risk of catastrophes States with higher risk should have insurance rates reflect that and not punish those living in other states.
“I don’t know how insurance companies can charge higher house insurance rates in states or areas that have low risk of catastrophes”. Someone’s gotta pay for insurance companies to maintain profits. Might as well be you.
Risk pooling is how insurance coverage works. Risk pooling by state boundaries makes no sense. There is no I in a r_sk pool.
Risk pooling among peers of similar risk levels works. But it’s grossly unfair to ask people in upstate New York to pay for the risk-taking behavior of people who live on the Florida Coast. For this reason, my local insurance company (basically organized around state lines) charges me 1/3 of what I was paying a national company.
Risk just doesn’t disappear. You’re simply shifting the type of risk.
If an insurance company only covers a specific area, and that area suffers a catastrophic loss of some kind to many citizens/homeowners, your small/local insurance company many not have enough premiums paid or assets to cover those losses.
You should check with your state insurance commissioner on the assets and survivability of your new insurance company. I hope you saved 66% on a market insurance product. But if it seems like ‘too good of a deal’ there may be a (risky) reason.
Part of the increase in insurance rates for homes is most definitely, indisputably, due to climate change, and it is going to get far worse. Simple science: physics, chemistry, biology, geology, meteorology, astrophysics, mathematics, statistics, and computer science.
The cause of the Palisades fire was arson. Try again, AlGore.
The source of ignition of the fire doesn’t determine the severity or the burn characteristics of the fire.
True, weather plays an enormous role. Without the ignition? Less likely there’s a fire. And with full reservoirs, the severity of the fire is reduced. And with proper forest management, it’s reduced further. And if the fire dept chief is talking with the utility responsible for reservoir maintenance ans status and understands what resources are available, that would be good. And if the city had competent leaders and if the state had competent leaders, the risks would be reduced further.
Those latter items have not been addressed by CA.
Tell me about SB 326 and why Newsom didn’t sign it last week.
.
Lol. That is hilarious. You just fell hook line and sinker for luddite diddi waddi waddle.
i didn’t vote for newsom. lots of people did, though. people like you. the ones unwilling to read fine print.
From this quality of reasoning it’s a hop skip and jump to detonating nuclear weapons to stop a hurricane
The actual problem is dems and reps both groups are dunce’s they are called the Super Bowl people…..
The government will control everything. I voted for that. LOL
How’s that going for you Jean? Are you cucked enough to like watching your money go to Argentina?
Did you know? Companies facing financial difficulties often delay moving 401(k) contributions into workers’ retirement accounts.
Her 401(k) Contributions Vanished—and Her Company Had No Answers – WSJ
And the Federal Government does the same. Only on a much bigger scale.
That is why our National Debt includes $2.6 trillion that us Boomer payed into the SS Trust Fund.
Inflation isn’t the only problem. It’s also that lot of people (want to) live in places that are high risk (and even unsuitable) for mass human habitation (wild fires, hurricanes, tornados – and no water in the SW desert but that’s not an insurance problem) – while cost can be manageable with a small population they become prohibitively expensive with a large one. If insurance/service was priced according to risk/true cost that would almost necessitate a mass migration out of these locales because the majority of the population could just not afford it . . . no insurance = no mortgage . . . and what are the cost for that. Yes there are no -easy- solutions.
Before the Palisades fire, the average age of a home in the Palisades was 60 years. They have always had arsonists, power lines, trees, fuel loads, drought, etc. Up until a decade or so ago, there is one thing they did not have. It’s called a hoax, and they never had that before. The hoax is going to get far worse in the next decades. They started building homes and commercial buildings in the Palisades in the 1920s. So, in point of fact, people were not electing to live in a high-risk area. And then there’s the Gulf of Mexico, where the hoax is forming gigantic water balloons: tens and tens of trillions of gallons of water. And then the hoax is tossing them at random at the former Confederate States of America. And we’re going to build it back to like it was. Over and over and over and over again. We are not going to lose to an angry sky we filled with tons of carbon dioxide. We are going to call it a hoax, and defiantly build it yet again.
Caps?
Yes, yes, yes!!!
Wage and price Government dictates are always the best solution.
Oh, wait…
They worked well for Nixon.
Agreed, which is why I will be surprised if taco tries them…
After Hurricane Katrina hit in 2005 it caused about 1400 deaths and over $100 billion in property damage. An Engineer being asked as to how to prevent this much damage again said his suggestion would be obviously Ignored?
His suggestion was to stop any rebuilding in most of the severely damaged low lying areas. His suggestion was ignored by the local Government and now the Insurance companies have to increase insurance pricing to cover the ever increasing costs to pay for Government and homeowners ignoring this reality.
Building being allowed in compromised areas is still happening across America. Humans are often their own worst enemy and many will have to pay ever more for it.
Because people who live in those areas own the land and wouldn’t be able to cash out, so would basically have to start over somewhere else. Same with rising sea levels eating away at houses built on shorelines. Or villages built in dense forest areas.
Same problem with Gaza. No one wants to tell the people there “You gotta move”.
Some of what we learned from Katrina: hurricane strength is rated from 1 to 5. Part of New Orleans is below sea level. New Orleans is in a hurricane-prone area. Their dirt levees were overtopped by a Cat 3 hurricane. We paid a good $100B to rebuild, and the rebuilt levees are still made of dirt and only built to withstand a Cat 3 hurricane. You could not make this shit up.
The low-lying areas of New Orleans could be maintained and protected, but only at great expense and at great effort with ongoing vigilance. They do it in Holland. New Orleanians are not Dutchmen.
Let you in on a little secret, the Dutchmen, by their own admission, are no longer the Dutchmen. They know they are going to lose to a hoax. They’ve got nothing.
Sadly the best insurance is no insurance. Then FEMA will cover your losses.
On both home and auto insurance, each has a third party liability part and a first party (you) part.
On an auto policy there is Underinsured Motorist and Uninsured Motorist parts; they’re talking about “the other guy”.
Just saying. YMMV
I save a lot on each policy because I live in a non-urban area away from the coasts and major waterways where I have to put on a coat half the year.
Uninsured/underinsured parts have skyrocketed due to irresponsible idiots with a $100K vehicle and carrying the state minimums of $30K/$60K/$25K for liability(In Texas). They can afford a $100K vehicle but not afford to take liability responsibility. Of course they generally have very little net worth, so the thinking is go ahead and sue me.
I changed my insurance from a national company to a local insurance company and my insurance dropped by a huge amount (home and auto combined ended up being 1/3 the price the national wanted- same level of auto coverage and I actually increased home insurance coverage.) Interestingly enough, my region has a low exposure to weather and climate related events yet quite high construction and supply costs. So I don’t think it’s accurate to completely discount growing climate and weather risk.
I suspect that nationals are averaging the cost between customers of varying risks- how intentionally I can’t guess, but at a marketing level there is a motivation to do so.
My brick home was built in 1927. It still has its original roof: asbestos-concrete shingles. Light and durable, obviously. And, now illegal. In Fort Worth, my roof has survived a large number hail and wind storms. Has made the home insurance companies a small fortune. Have lived here for 12 years, and have watched neighbors replace their roofs, some more than once, due to hail damage. I’m thinking of dropping home insurance. Exclusive neighborhood. The lot would probably bring at least $700,000. Two houses nearby for sale, both at 3.9 million.
Another major reason why the “posted inflation numbers” are being manipulated to much lower levels than reality.
End the fed. End the MIC and the wars that create the immigration headaches for the immigrants and the natives alike. End the healthcare complex. End the education loan cartel. End public-private “partnerships”, because they’re fascist ripoffs. They drive up costs.
Print sovereign money. Balance the budget. Make trade, not war.
What you’re trying to say is “end the modern USA”
Have you noticed the quality of life for the bottom half has been going in reverse the past 40 years?
In New Zealand there are NO personal injury lawyers. The insurance cos pay into a pool of money to cover injury. The payment is determined by a formula and commission. Insurance premiums are stable. Bust up the lawyer class to lower insurance costs
Shakespeare said this 500 years ago!
New Zealand is a small, high-trust society.
https://www.usnews.com/news/best-countries/rankings/trustworthy
by your inference it would seem the US is large and untrustworthy.
No argument here.
Not exactly the answer in California. Our rates were capped (Prop 187) years ago. “It’s complicated.” We have had 50 years of unchecked illegal immigration here, and many of those immigrants don’t have well-paying jobs to keep up with the high cost of living in California; they just don’t buy insurance. I know; have been hit by 2 and they take off, leave you to pay for repairs, yourself.
We also have “leadership” that refuses to trim forests or do prescriptive burns or create fire breaks, so now, under Newsom, have catastrophic fires. The insurance industry already abandoned quake insurance in California, after the 1994 Northridge quake) with the State being the only insurer, essentially.
Homeowner insurance companies are leaving due to the fires (yes, Newsom was warned about this by insurers; did nothing) and that limits the companies who will also underwrite quake insurance. California law mandates that the State of California provide the quake insurance as long as you have the same homeowner’s insurance company underwriting that policy.
California’s FAIR plan also mandates that if a catastrophic quake happens, they do NOT have to pay for the damage to you in a lump sum. They are allowed to issue a payment schedule. Strict regulations on top of capping insurance company profits, and horrific leadership in a one-party Democrat State has destroyed the insurance industry in California.
We are your warning, US.
And yet Florida has largely been a republican state for a long time and faces the same insurance catastrophe as California. Hmm….what’s the common denominator between California and Florida? Perhaps in the line of fire of too many disasters for both?
And Trump has deported billions of illegals according to some of the commenters here so whatever ill they caused should all be gone now so why aren’t insurance rates plummeting if illegals were causing all the problems with food, housing, insurance, healthcare and whatever else immigrants get blamed for?
Climate change? Did I win?
In part, yes you did.
Nah. MPO, it’s just greed.
Yes, pure greed as Allstate reports $558 million in catastrophe losses.
https://www.gurufocus.com/news/3145962/allstate-all-reports-significant-catastrophe-losses-for-september
Allstate (ALL) disclosed that it endured an estimated $161 million in catastrophe losses during September, with an after-tax impact of approximately $128 million. These losses stemmed from eight separate wind and hail incidents. For the entirety of the third quarter, Allstate’s total catastrophe losses reached $558 million, translating to $441 million after-tax. This data highlights the financial impact of severe weather events on the company’s operations during this period.
Because of climate change, small-stone hailstorms will become less frequent, and large-stone hailstorms will become more frequent. So perhaps fewer hail events, but more of the kind that bust the crap out of roofing.
Hail also destroys solar panels – which is God punishing those trying to stop global warming.
That is not a problem.
I see you’re likely someone who swallows every lie uttered by
TV.
b-b-b-but DeSantis!!!!
CA is a basket case and loses over $10 billion/year in healthcare costs provided to illegal aliens for no cost. But we can’t figure out how to keep reservoirs full during fire season.
Yeah, just like Fla. Call me when the shuttle lands, dude.
Florida hasn’t always been a Republican state, while California has been solidly Democrat since 1984. A bit ironic, and a clue to our destruction.
Pretty much all wrong.
Without saying what’s wrong. I think I can guess where you get your facts – out of your ass.
Bingo on the car insurance.
Rates of such risks have momentum; they do not adjust immediately to circumstances.
By the way, health insurance is also driven up by non-payers … the money has to come from somewhere.
Home insurance have different dynamics, but obviously related to increases in prices.
I’m outspoke on the hidden costs of tariffs. Say for car repairs. For decades China was coming on with more and more cheap replacement car parts. That has largely played out. Even worse there’s stiff tariffs happening to those parts. Goodbye cheap repairs!
Excellent comment
I added to my post.
Thanks
Many states have laws against insurance companies using non-OEM parts for repairs. Some states allow it but the insurance company then has to warrant the replaced part as comparable to the OEM in terms of performance and insurers don’t want that additional liability. Many insurance companies require OEM parts because it is cheaper than using non OEM (the cost to paint a non-OEM part to match OEM is more than buying the OEM part in the first place). One cannot say that tariffs by themselves have increased the costs of repairs.
Another good comment. Thanks
OEM doesn’t mean factory specifications.
oem means you’re buying a part made by the same company that made the original part of for the GM, Ford, Honda, BMW, etc.
As a practical matter, OEM parts typically are not stamped with the logo of the carmaker but are identical to the part used to mfg the car in every other respect.
My mother worked for a large company that made electric switches. They made the same switch with very different components with very different specifications for the US government,RCA, Zenith, and Sears. The same outside looking switch. They would be considered an OEM company. The switches were sold at different prices. You can never assume that OEM is an equal product. The insurance company is selling you a great tail.
If you do any car repair work for yourself, you’ll see the patterns. Want the same part from TRW stamped with a Honda logo? 2x the price, same part.
I’ll repeat. Same part.
If you order from an unknown overseas mfg then of course you’re rolling the dice. I wouldn’t try that.
it’s even worse than you think. insurance companies won’t let repair shops use OEM parts that have been repaired/brought back into spec.
Cost of repairs has more to do with swiveling headlights that cost $2500 each and airbags for the hood that cost $1700 each.
Unfortunately car companies use this as an excuse to massively rip off the consumer.
On my last car (BMW) one of the plastic air vent covers broke. I spoke to a garage that only dealt in OEM parts (for the reasons you cite). The plastic part was quoted as 200 dollars before labor. I just laughed. I went online and searched for the part and found a no-name brand (I assume it was Chinese) plastic part equivalent for $3 dollars (yes, 3 dollars) and had it installed by a mobile mechanic for $10 extra bucks when he did my oil change etc.
Yes, if you are talking engine parts or computer modules you want OEM stuff to be sure it’s up to spec and will work. But the idea that you need OEM stuff for plastic air vent covers and other such stuff is nonsense and costing the public and fortune.
About time we force ourselves to pay American citizens to make our car parts. We’ll all be richer for it. Land of milk and honey… right around the next corner.
Maybe so. But getting to that corner is going to be a b!tch! And I believe a lot of folks won’t make it…
Soon there will be big billboards along the Rio Grande begging people to swim across so they can come back and make and do things for us for cheap. Just like in the good old days.
There isn’t any such thing as cheap auto repairs any longer. IN my area of the SF Bay area, independent hourly flat rates averages around $200/HOUR. Dealer rates are $350-$400 (or more for Porsche., BMW, Mercedes, etc).
If you buy an EV, you should have less repairs necessary compared to IC cars.
Problem is a lot of the repairs for EVs consist of scrapping the car entirely due to battery fears which makes repair costs a lot higher.
Note that by repair costs I mean damage via accident rather than replacing worn out stuff.
I still drive an IC car and haven’t had an accident in decades.
it looks to me that battery issues with EV cars only apply IF you keep a car for 8 years or longer. Most people don’t do this. So battery issues are on the user car purchaser, not the new car buyer.
It is true that Elon’s testosterone driven thirst for speed produced a car the rental car companies are dropping like a rock because everybody wants to go 0 to 60 on their business trip/vacation faster than they can think.
This is interesting: