My car insurance rate suddenly spiked. I’ve been a long-term Geico customer in New Jersey, paying around $1200 every 6 months for two cars and two drivers who collectively drive less than 7000 miles per year. Just before renewal, I received a bill for $4100 for the next 6 months from Geico. When I called them, they mentioned that the underwriters approved the increase and couldn’t pinpoint any specific reason for the hike. Both my wife and I work from home and don’t commute for work. Has anyone else experienced a similar issue? Any insights into why it quadrupled?
Additionally, there have been no accidents or moving violations in the past 5 years, aside from a minor $50 obstruction of traffic ticket for my wife.
Several factors likely beyond your control are contributing to these increased costs, which are then passed on to you.
If I had to pinpoint the most significant reason for the rate hike, it would likely be medical payments (med pay). Specifically, there’s been a trend of people seeking unnecessary and expensive treatment after minor accidents in order to file bodily injury claims.
Another critical factor is the upcoming substantial increase in the state minimum for property damage in New Jersey. GEICO will likely face higher costs for property damage claims, especially as many policies they sell have limits set at $5,000 for property damage.
Inflation in general has also played a role, particularly the sharp rise in market values of vehicles in 2021. This has significantly increased costs for totaling cars, especially in areas like NYC and New Jersey, where tow yards often charge exorbitant fees and rates.
Just to give perspective, the premium increase reflects their aim to achieve a 3% profit margin by the end of the year, though reaching that target seems unlikely.
My annual rate increase for auto insurance was 17.7%, or an additional $229. I have complete coverage and an impeccable record.
I just paid my renters insurance bill with the same provider, and the increase was $162, or 64%, over the previous year. utterly crazy