FILE - Heavy traffic is seen at O'Hare International Airport in Chicago, Monday, April 15, 2024. . Auto insurance rates rose 2.6% in March and are up 22% from a year ago. .
But the persistent rise in rates over the last two years has been far more sweeping. New vehicle prices starting spiking during the pandemic, mainly because of a worldwide shortage of computer chips amid production cuts and supply chain bottlenecks. Dealers spent much of 2021 with few or no cars in stock.
“The severity is really the thing that has influenced rates more over the last two years than anything,” said Greg Smolan, vice president of insurance operations at AAA Northeast. “A fender bender in the past didn't have all the sensors and cameras.” “Our sole concentration last year was to get the right rate,” said Progressive CEO Tricia Griffith, during a fourth-quarter earnings conference call. “We feel like we’re in a really great position now.”
“Companies are getting a lot closer to rate adequacy now,” Smolan said. “I think you'll see some flattening out of the real large increases.”
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