Lawsuits, Cancellations and Nosebleed Level Insurance Rates
Editor’s Note: With this issue, AGRR magazine debuts a new department called “Insurance Talk.” It focuses on areas where auto glass and insurance intersect and how insurance practices affect both industries’ mutual customers.
Insurance Rates to Hit Nosebleed Levels This Year
Insurance industry analysts expect auto insurance rates to jump by 12.6% across the U.S. in 2024 due to rising repair costs and frequent severe weather, according to the “State of Auto Insurance in 2024” report by ValuePenguin.com.
Last year, insurance rates rose 11.2%. The average cost of full-coverage car insurance across the U.S. in 2024 totals $1,984 per year or about $165 per month.
The report says Michigan tops the list of states with the most costly auto insurance, with rates averaging $386 per month, the highest in the U.S. and 134% higher than the national average. The report attributes the increased cost to Michigan’s expensive Personal Injury Protection coverage requirements.
Florida and Nevada auto insurance rates rank those states as the second and third most expensive. Florida’s $249 per month rates are 51% higher than the national average, while Nevada’s $247 per month are 50% higher than the national average.
Looking for cheap car insurance? Move to Maine ($92 per month), New Hampshire ($96) and Idaho ($102). Auto insurance in these states is 41% less expensive than the national average.
According to the report, other states with substantial increases in 2024 include Arizona (17%), Connecticut (17%), Louisiana (16%) and Georgia (16%).
Allstate Drops Commercial Coverage in 15 States
Allstate informed insurance regulators in 15 states of its plans to drop commercial coverage.
“The reason for withdrawal is to retire outdated and cost-inefficient legacy technology to enable a shift in focus toward modernized products and platforms that will optimize the product and experience for our valued customers,” Allstate says in one of its corporate filings.
The insurance company plans to pull out of Arizona, Arkansas, Connecticut, Idaho, Kansas, Maine, Michigan, Montana, North Carolina, Oklahoma, Oregon, Rhode Island, South Carolina, Virginia and Wisconsin.
State Farm Insurance Fights Steering Lawsuit
State Farm Insurance, a defendant in a lawsuit before the U.S. District Court of Maryland, filed a motion to dismiss in late September 2023 a complaint by Total Recon Auto Center (TRAC) alleging the insurance company deliberately spread “harmful misinformation” to customers about TRAC.
District Court Judge Peter J. Messitte scheduled a March 27, 2024 hearing for both sides to present oral arguments.
The case involves a dispute between TRAC, a collision center in Rockville, Maryland, that provides services to Tesla vehicles, and State Farm. TRAC accuses State Farm of “deliberately disseminating harmful misinformation” to its insureds who were “actual or potential customers” of Total Recon. The outcome of the case could have implications for the auto glass industry.
The company argues that insurance companies, including State Farm, charge more for insurance coverage on Teslas and “benefit when their Tesla-insureds use non-TRAC repair shops, which charge insurance companies lower fees and agree to take shortcuts that are inconsistent with OEM standards.”
In its initial complaint, filed in mid-August 2023, Total Recon alleges that State Farm was “improperly ‘steering’” its customers away after initially agreeing to pay the Tesla Labor Rate “so that State Farm insureds who come to Total Recon would not have to pay out of pocket the difference between the ‘covered’ rate that State Farm deems reimbursable and the Tesla Labor Rate.”
The plaintiffs say that State Farm has since started using language that specifically steers customers away from them, including telling “current and prospective customers that ‘this shop does charge out of pocket expenses,’ and that it is ‘out of network,’” and thus the insurer can’t guarantee there won’t be out-of-pocket expenses.
State Farm responded by requesting the case be dismissed, citing Total Recon’s “failure to state a claim upon which relief can be granted,” among other reasons.
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