GEICO, Allstate seek rate hikes in New Jersey
GEICO, Allstate seek rate hikes in New Jersey | Insurance Business America
Motor & Fleet
GEICO, Allstate seek rate hikes in New Jersey
Insurance giants file for double-digit increases
Motor & Fleet
By
Mika Pangilinan
Drivers in New Jersey are set to see higher premiums as several auto insurers request state regulators for rate increases.
Two of the companies looking to raise their rates are GEICO and Allstate, which have both filed for double-digit hikes.
GEICO has a pending request for a 26% rate raise, while Allstate has asked to increase rates by 29%.
The pending hikes come as a new state law requires higher minimum liability coverage on car insurance policies purchased or renewed after January 1 of this year.
Under the new law, which was signed by Governor Phil Murphy in 2022, the minimum liability coverage has now been set at $25,000 from $15,000. Furthermore, policies must include $50,000 in coverage for accidents involving multiple injuries or fatalities, up from the previous requirement of $30,000.
This law will also raise liability minimums again in three years. Starting from 2026, the minimum coverage will increase to $35,000, with the coverage for accidents involving multiple injuries or fatalities raised to $70,000.
“We can’t even estimate what that impact is going to be because that number is going to be unique to New Jersey across the country,” O’Brien told NJ Spotlight News. “We have no experience off of which we can estimate what financial impact that will have on New Jersey drivers.”
Aside from the new law, industry experts said the rate hikes are also being driven by inflation and increased insurance costs.
As noted by Michael Barry, chief communications officer of the Insurance Information Institute (Triple-I), inflation has made it hard for insurers to keep up with the frequency and severity of accidents, considering how vehicle replacement parts and auto body labor repairs have all increased in cost.
The prevalence of vehicle thefts is another factor, with National Insurance Crime Bureau (NICB) revealing that more than a million cars had been stolen in 2022.
“If you have a theft, now all of a sudden we’re talking about a total loss,” Barry told NJ Spotlight News. “This is a $25,000 to a $30,000 claim to the auto insurer.”
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