Insurance Bills Rise as Texters Crash Cars
More drivers on the road + costly parts + texting = bigger claims.
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When Travelers said in January that it was ready to increase prices for car insurance, Wall Street’s attitude was: “What took you so long?” Consumers may soon be wondering when the premium hikes will ever end.
The largest U.S. auto insurers have suffered from years of higher-than-expected claims, frustrating investors. Industrywide, companies have been paying $1.05 in costs for every $1 in premium revenue. A decade ago that figure was 95¢—meaning insurers came out a nickel ahead. Allstate and Berkshire Hathaway’s Geico unit have been raising prices since at least 2015, making Travelers one of the last big shoes to drop.