according to State Farm Insurance lost more money insuring cars last year than it ever has in its 95-year history.
Late last year, State Farm imposed its biggest auto insurance rate hike in 14 years in its home state of Illinois.
When combined with the costs of running its auto insurance business, State Farm lost $7 billion for the year in that segment.
State Farm’s staggering auto insurance loss is the most visible sign yet of how distracted driving and rising repair and medical costs are hammering car insurers.
Other State Farm units did better than auto insurance.
according to “It is important that going forward, personal injury discount rates are set at a level that is fair to both claimants and consumers.
Could not subscribe, try again later Invalid EmailThe Government signalled a screeching u-turn on changes to car insurance rules which could push up premiums for millions of drivers last night, just 24 hours after they were announced.
The Association of British Insurers branded the shake-up, which could wipe millions off the profits of the country’s largest insurance companies “crazy”.
But the ‘discount rate’ was set in 2001, when savings rates were much higher, so the Ministry of Justice decided to reduce the rate to account for this.
The change affects the ‘discount rate’, which reduces the payout to make up for extra money they could make by investing the lump sum over a long period of time.
Allstate hikes car insurance rates in Illinois
according to Six months after Illinois’ largest car insurer boosted rates by 6 percent, the state’s second largest is following suit.
Allstate filed in January to boost rates for more than 70 percent of its auto policyholders in Illinois by 5.9 percent, according to a filing recently posted by the Illinois Department of Insurance.
Late last year, Bloomington-based State Farm Insurance, by far the state’s largest car insurer, hiked auto rates in Illinois by 5.8 percent, its heftiest single increase in the state in 14 years.
Auto rates are rising more than normal right now as insurers cope with rising claims costs due to higher numbers of accidents and elevated repair and medical costs.
Meanwhile, State Farm’s auto insurance customers have grown slightly from 2.67 million as of October 2015 to 2.71 million as of September 2016, according to state filings.
collected by :Olivia Mathio