New York insurers have seemingly had a change of heart when it comes to rate increase requests. In August, the New York Department of Insurance asked the 48 insurance companies requesting an average 8-percent increase in rates to reconsider the hikes in light of gas prices, but the Insurance Information Institute claimed that rising collision repair and medical costs justified the increases. The insurance department recently reported that most insurers have either lowered their increase requests to around 1 percent or withdrawn them completely.
Long Island Auto Body Repairmen’s Association Executive Director Ed Kizenberger contended in August that collision repair rates shouldn’t be hurting insurance companies because the rates paid by insurers haven’t increased dramatically in years.
“What frustrates me is that the insurers are really milking the American public here on premiums,” Kizenberger said. “For all of the advertising and marketing that they do, if they put a little more effort into controlling their costs, that might affect premiums in a positive way for the consumers, instead of trying to attribute the ridiculously low labor rates that they pay out to collision repair shops as being the reason why they have to raise their premiums.”
A study by the trade group QPC suggested that insurers haven’t properly addressed nationwide changes in driving habits and “must focus their pricing and products to address the consumer’s emerging switch to new vehicle designs, new household vehicle mix, new driver usage patterns, and a changing underlying cost structure.”
One insurer quickly took notice of changing driving trends. New York’s largest auto insurer, GEICO, was one of the first companies to withdraw its rate request in August. Companies that didn’t reexamine their filings didn’t receive approval from the state. Click HERE for our previous story on the rate hike requests.
