Re: https://jalopnik.com/how-exactly-does-trump-plan-to-lower-car-insurance-rate-1851652717

I dealt with property & casualty insurance companies (of which auto is a part) for years as a lawyer and later in marketing, and the single biggest thing Trump could do to affect auto rates, he will never do.

Because that thing is to aggressively combat climate change. 1/

P&C insurers don't treat "auto" as a separate bucket from "homeowners" or "business property damage" or any other coverage they offer, exactly.

Rather, they math out risk/profit/loss in each bucket, then adjust any and all buckets as needed to keep their balance sheets black. 2/

The NUMBER ONE REASON auto rates are increasing is because PROPERTY DAMAGE is increasing.

The #1 reason property damage costs are increasing is because the number and severity of catastrophic weather events is increasing - every year, for decades.

The reason those catastrophic events are increasing is CLIMATE CHANGE. 3/

(Close #2 reason auto rates are increasing is auto ownership is decreasing, because an increasing number of Americans can no longer afford cars. Note that Trump also has no plan whatsoever to increase wages or subsidize the cost of car ownership directly.

Also note that putting more cars on the road will worsen climate change and is thus not a long term solution.) 4/

P&C carriers have known this for at least 20 years, btw. They have not kept it a secret. It's a major topic in publicly-accessible trade journals and has been since at least 2008, the year I started working in the industry.

Insurers know climate change is real and it is their largest threat. But they are in the business of insuring issues that exist NOW, not fixing the future.

If we want rates fixed, we need to fix the future. Trump won't touch it. 5/

@danialexis
Insurers know what's up.

My auto insurance rates went up this year (ouch) and when I called my insurance agent to ask why, "more claims in your state" was the reason he gave me. (paraphrasing)

But this aligns with what you just said.

@janallmac I'd say that's half right. They could absorb the cost of more claims *if* they had a record low in property damage to balance it out.

BUT record high claims on both sides? Nah, the money has to come from somewhere.

(There were record or near-record claims in most US states in 2021 and 2022, and a few states continued that trend in 2023, so that tracks.)

@danialexis
Wow, ALL states? Was not aware. I was trying to figure out why my state would be more affected.