More severe auto accidents. Higher car repair costs. Supply chain issues.
Auto insurance providers have been asking for rate hikes more frequently and at a higher rate in the past several years, the New Jersey Department of Banking and Insurance said.
More than 20 companies have been granted double-digit rate hikes since January 2023, with the largest going to Amica Property & Casualty. It received a 20% increase after asking for a rise in rates of 30%, agency data shows.
“As we continue to deal with ongoing inflationary pressures, supply chain disruption and the elevated cost of auto repairs, the rate increase is necessary to restore pricing adequacy,” an Amica spokesperson said. “Until we can do that, we must make decisions in the best interest of our company and policyholders.”
It’s unclear if every driver would face the same increase if the request is approved and how many customers each company has in New Jersey.
Of the pending requests, Metromile’s 63.1% hike request tops the list, followed by Liberty Mutual, which is requesting a 24% hike, and Plymouth Rock, which has requested an increase of 18.5%. More than a dozen have pending requests are for 10% or higher, the data shows.
Metromile, which is based in San Francisco and owned by Lemonade Inc., did not respond to requests for comment. It is licensed to provide insurance in every state except Tennessee, its website said, and it currently writes policies in eight states including New Jersey.
Generally, the requests for increases are “attributed in part to attributed in part to inflationary trends, reinsurance costs, supply chain issues, increases in new/used car prices, increased car repair costs increased incidences of excessive speeding and distracted driving that result in more severe accidents and fatalities,” said Dawn Thomas, a spokeswoman for the New Jersey Department of Banking and Insurance.
Thomas said rate change requests must be “reasonable, adequate and not unfairly discriminatory.”
“If the Department finds that a rate request by a carrier is unreasonable, inadequate, or unfairly discriminatory the Department will not approve the request,” she said.
She said the agency blocked $459 million in auto insurance premium increases during 2023 and the first two months of 2024.
“The Department remains committed to reducing the impact on consumers while ensuring they still have access to the insurance products they need,” she said.
The agency recommends consumers review their policies annually and shop around to find the best coverage at the best price for their needs.
Consumers should review the agency’s Auto Insurance Buyers Guide.
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Karin Price Mueller may be reached at KPriceMueller@NJAdvanceMedia.com. Follow her on X at @KPMueller.
