After Allstate suffered billions of dollars in losses and failed to get the rate increases it wanted, it resorted to the nuclear option.
The insurance giant threatened last fall to stop renewing auto insurance for customers in three states that hadn't given in to its demands, which would have left those policyholders scrambling for coverage. The states blinked.
In December, New Jersey approved auto rate increases for Allstate averaging 17%, and New York, a 15% hike. Regulators in California are allowing Allstate to boost auto rates by 30%, but still haven't decided on its request for a 40% increase in home-insurance rates after the insurer refused to write new policies.
For many Americans, getting insurance for both their cars and homes has gone from a routine, generally manageable expense to a do-or-die ordeal that can strain household budgets.
Insurers are coming off some of their worst years in history. Catastrophic damage from storms and wildfires is one big reason. The past decade of global natural catastrophes has been the costliest ever. Warmer temperatures have made storms worse and contributed to droughts that have elevated wildfire risk. Too many new homes were built in areas at risk of fire.
As losses mounted, inflation only made matters worse, boosting the cost of repairing or replacing cars or homes.
When you add it all up insurance is my greatest monthly expense.
It sounds like lenders will need to start taking into account peoples net worth and liquidity when underwriting mortgages, because pretty soon homeowners insurance is no longer going to exist due to cost.
I'd bet lenders do the same with new and used car loans. Not enough liquid cash to cover a total loss accident? Sorry, no loan for you.
Good luck to poor people and even the middle class going forward. It looks like another reason why you will own nothing, and be happy.
LOL....Don't worry, I'm sure that it’s mostly transitory.