Philadelphians across the city are reporting increases in their car insurance. The Inquirer, drawing directly from “BankRate,” a web page, reports that car insurance rates in Pennsylvania have increased by 26 % in the last year. According to Bankrate, the increases in Philadelphia were far worse. “Looking at metropolitan statistic areas, Philadelphia and Detroit saw some of the largest jumps in average full coverage premium costs from 2023 to 2024. Average rates in Philadelphia increased 154 percent from $1,872 to $4,753.”
BankRate implies that the rate increases are beyond the control of the insurance companies and have nothing to do with insurance companies’ profits.
“Several factors influence your rate, and some you can’t control,” BankRate said. “These include state-mandated car insurance requirements, population density, and driving habits of others living in your state or ZIP code. Inflation and extreme weather, which are both significant influencers for rates in 2024, are also beyond your control.”
It is almost as if insurance companies have nothing to do with insurance rates, and insurance companies’ stock prices, dividends, and earnings play no role. BankRate, which the Inquirer did not divulge, is paid for by the insurance and finance industry. In the small print, BankRate discloses, “BankRate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where, and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity, and other home lending products . . . Our content is backed by Coverage.com, LLC, a licensed entity”
Also from the Wall Street Journal: “Shares of Travelers, a bellwether for the property and casualty sector, closed at an all-time high earlier this week, up 35% from their lows last fall. The jump came after the company reported a record profit for its fourth quarter, boosted by double-digit rate increases in its business and personal insurance units.”
Travelers is not alone. Progressive more than doubled its quarterly profits. Allstate’s stock price reached an all-time high last week.
Insurance companies claim they have to raise rates because they lost money in the year after the COVID shutdowns ended. The losses, however, were offset by the “outsized” profits insurance companies collected as people stayed home, drove less, and had far fewer crashes. 90% of the largest insurance companies refused to reduce rates to balance the fewer miles driven with insurance premiums.
How are insurance companies getting away with raising rates to earn record profits?
By law, insurance companies seeking the Insurance Commissioner’s approval for a rate increase file for the higher rates. Notice of the request appears in Pennsylvania Bulletin, a weekly publication of very limited circulation. There is no requirement for insurance companies to notify their consumers of pending increases. If you don’t read the PA Bulletin, you don’t know if your company is trying to raise your rates.
Here is where it gets more complicated. Philadelphia Hall Monitor’s review of the 2023 and 2024 PA Bulletin reveals that no car or homeowners insurance company has filed for a rate increase. The Pennsylvania Insurance Department Web Page under “Consumers” “other rate filings” says “Below you will find rate filing information relating to the various types of insurance rate reviews the department has, or currently is reviewing.”
The only listed car rate increase in the category, “Property & Casualty Filings” is a proposed 2020 rate increase by Mid Century Insurance. There is no other information regarding any additional car insurance rate increase listed.
Philadelphia Hall Monitor has filed a formal request with Pennsylvania’s Insurance Commissioner for any and all information that would explain if the BankRate was correct in stating rates in Philadelphia have gone up by 154% and, if so, where are the decisions granting the rate increases?
Hall Monitor has called Dennis Sloand of the Insurance Department’s Office of Property and Casualty, who was tasked with coordinating the Insurance Company’s last data call. He has yet to return the call. Emails to the Insurance Department have also gone unreturned.
If you have seen a significant increase in your car insurance, please contact Hall Monitor at Hall@HallMonitor.org. Let us investigate your rate increase and see if we can get an explanation for you that goes beyond the answer of why the dog licks himself-because he can.
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