[kirse]

After pricing auto insurance recently it's pretty obvious this is happening in that industry as well. While shopping around multiple quotes across 7-8 providers and calling at least 5 separate insurance agents to try to gather quotes, all of these companies are providing similar quotes within a few cents/dollars of each other.

I vent my frustration to a few agents about the yearly rate increase insanity and they all shrug, give their non-empathetic "I understand" telephone script and blame it on the "system" calculating the prices and make some useless excuse about inflation.

I've got a clean driving record, a fully paid-off cheap vehicle, in a reasonably responsible age bracket, and the cost of decent auto insurance these days is essentially another car payment. Within 5 years I'll have paid back the insurance company 60-70% the value of the vehicle. The Gov/FTC needs to take a look at these companies, especially if they're forcing us to hold the insurance to reasonably participate in society.

[ejb999]

The fact that you car is 'cheap', is not the driving force behind the cost - you may drive a $10K used car, but you can still crash into someone else's $120K car and also put the other driver in the hospital with 100's of thousands of dollars of medical expenses.

Once your car is paid off, you can usually drop the collision damage on your own car - but don't be surprised if you are still paying thru the nose.

Curious though: what state are you in, and how much are you paying?

As comparison, we own three cars (2015, 2013 and 2011), for three drivers (youngest is 21) and have pretty decent level of coverage, including coverage for damage to our cars even though they are paid off - and only pay ~$1600/year in total for all three cars/drivers in Mass, which to me seems pretty reasonable.

[Retric]

The national annual average for car insurance is $2,545 per year for full coverage and $741 per year for minimum coverage.

Massachusetts is a severe outlier in terms of car insurance and your well below the norm. MA averages 1646/person/year vs 3950/person/year in Florida. https://www.bankrate.com/insurance/car/states/#average-car-i...

[MaKey]

How come car insurance is so expensive in the US? In Europe it's vastly cheaper and the policies themselves are much better.

[Retric]

I don't know the exact calculations but people in Europe have nationalized healthcare, more easily lose their license, drive less, and generally have smaller and cheaper vehicles.

[lozenge]

Well traffic deaths per capita are about double in the US so that probably carries over to other insurance-triggering incidents.

[ejb999]

Yikes! That is quite expensive compared to what I pay.

[nullc]

> can still crash into someone else's $120K car

The significant increases in relatively irreparable high value cars on the road is presumably a driver of increasing insurance rates.

One solution would be to cap liability for damages to other people's cars to the median value of a car on the road. If you own a car worth more than the medium and want/need damage insurance for the full amount, you should take on that cost rather than saddling the public with it.

[crotchfire]

Certain brands are designed without any consideration for repairability. Like a smartphone (on wheels). Or an "inverse Toyota".

All the median-priced-cars from these brands, which are instantly totaled by anything other than cosmetic damage, are still driving up everybody else's rates.

[nullc]

I don't know how to draft a law that deals with that, ... and it's probably a worse problem than the high price cars simply because fender benders are more common than serious accidents.

[orwin]

I think the average cost per year per person in my country is 1500€, so it is actually way cheaper than what i expected for the US.

[tomrod]

> not the driving force behind the cost

Great. Socialize healthcare as the current non-single-payor market is forcing all sorts of market distortions in unrelated markets, AND fix the price fixing. Win win win.

ED: adding clarity for the call for socializing healthcare to dampen the massive price distortions in other markets.

[maxboone]

Healthcare is socialized in Europe and car insurance is still similarly priced (750 - 1500 per year, average in NL is 950 per car for only liability) mostly due to liability costs.

Required insurance covers € 7.5 million for personal injury, € 2.5 million for property damages.

Edit: P.S. I am in favor of single-payer healthcare, I just don't think that is the particular cause of expensive liability car insurance - rather personal injury and property damages would seem a larger driver to me.

[margalabargala]

This is interesting to me, an American unfamiliar with European systems.

> Required insurance covers € 7.5 million for personal injury

So in Europe (or at least some parts of Europe with otherwise socialized healthcare?), if someone is injured in a car accident, their medical bills are paid for by the insurance of the person who hit them, and not that country's single-payer system?

[orwin]

I think in my country, the single-payer system is still linked to an individual, by his social security number, so the culprit's insurance will "pay", even though what will be paid in healthcare will mostly be aestethics or other non-reimbursable. But mainly, it will pay for damages. In my country, f you are hurt in a car accident, you can be paid depending on your average salary and invalidity percentage, called an "invalidity rent". If docotr estimate you're invalid at 80%, you'll get paid 80% of your last month salary until they check on you again, then if you're 40% invalid its 40% of your salary (before the accident, even if it was years before)... up until you're fine. I think they have to give you at least 10% as long as you have sequellas, even minor ones. That, plus fixed damages (between 5k and like 40k).

It isn't perfect. It doesn't take into account missed career oportunities, inflation, the pain, or mental issues. But you can work besides the money they give you, and oftentime, you'll get the 10% for a long time, because paresthesias (whatever that thing is spelled in english) and small sequellas can stay for a long time (I know soemone who earn roughly 200€ per month, but she has trouble working in most kitchens now. She used the main check to get into academia though, and will probably end up with a master's degree for her troubles).

[lozenge]

I'm in the UK so we don't have "medical bills", the hospital doesn't have a billing system. There is one they dust off for international patients, and there is internal billing between regional and local organisations, but these bills aren't attached to individual patients. Edit: to be clear, this is unlike most European countries which still have multiple health insurance providers, but the health insurance is almost entirely government paid. The UK doesn't have health insurance, the government directly funds and runs the healthcare providers.

Still the insurance needs to cover loss of income, private care when NHS care is not fast enough, and "general damages" ("This covers the pain and suffering you have gone through and the [non financial] impact the injury or illness has had on your life")

[InsomniacL]

The injured party may decide to receive treatment though a private facilitate and recoup the cost from the insurer.

Regardless, if I loose my leg through the negligence of someone else, paying for the amputation isn't going to make me 'whole' again.

you'd have to put a literal price on my leg.

[tomrod]

I believe the phrase of art for this is value of statistical life.

[maxboone]

No, those are not billed to the person who caused the injury.

The personal injury part is meant to compensate for personal injury, such as "compensation" for becoming unable to work, or live the same way as before.

[Retric]

Car insurance in Europe averages ~1050 USD/year, US averages edit: $2,545 USD/year that's a huge difference IMO.

[maxboone]

Even when you put it next to the average (or better, modal) wages?

[Retric]

Yea, though wages and rates vary enough it's worth looking at individual countries.

England is an outlier. Average wage works out to 44,252.67 USD (£34,963/year) vs US is at 70,248.63.

Average car insurance in England is 710.06 USD (£561/year) vs 2,545 USD in United States.

[tomrod]

Yep. Median wage in Belgium is ~3.5k euro / month, equivalent to ~3.8k USD / month. Median US wage is ~4.9k/month, about 30% higher, certainly not 150% higher.

[timy2shoes]

> Socialize healthcare as it is forcing all sorts of market distortions

I don't understand how you come to this conclusion. Can you explain?

[morkalork]

It makes sense with some extra punctuation: Great. Socialize healthcare. As it, is blah blah.

If you want even cheaper car insurance, you can even go beyond socialized healthcare. You can have socialized car insurance! Or in some cases a hybrid system where you insure your vehicle but not all trauma and damage to the other party. But I don't think Americans would be a-okay with seeing a government employed doctor when they make their injury claims. Even if outcomes are better than a purely private system.

[margalabargala]

If a large portion of the cost of auto insurance is to pay for potential injuries to someone that you hit, then we can conclude 1) single-payer healthcare would significantly lower the cost of auto insurance, and conversely, 2) the lack of single-payer healthcare is a significant contributor to the current state of auto insurance markets/pricing.

[SoftTalker]

No, because injury claims also include lost income, compensation for disability, pain and suffering, etc. not just medical expenses.

[timy2shoes]

I completely agree with your assessment and logic, but the parent posted suggested that socialization of healthcare (e.g. ObamaCare) is contributing to auto rates. That I don't understand.

[margalabargala]

Looking again, I think their comment can be parsed in multiple ways.

> Socialize healthcare as it is forcing all sorts of market distortions in unrelated markets

I interpreted that as a call to socialize healthcare, not a description of market effects that "socialized healthcare" has to the extent that exists in the US.

[spencerchubb]

I work in insurance. Most states have a Department of Insurance who approves price changes. Insurance prices are calculated using simple features, such as "If car is from year 2016, then multiply price by x"

However, the numbers are not publicized because they don't want competitors to have that info.

Another fun fact, a lot of people wonder, "Why doesn't an AI startup just disrupt the insurance industry?" It's because the Departments of Insurance have to understand the price formulas. Neural networks are infamously hard to interpret, so we would have to reform regulations before we can use neural nets.

[robocat]

> Why doesn't an AI startup just disrupt the insurance industry?

Also insurance requires that the insurer discriminate a good driver from a poor driver. However they should not discriminate against a protected status.

Good luck setting up a system that can only discriminate using some signals and not others.

It is a good mental exercise trying to think of ways to set up a startup that can discriminate without being obvious about it.

[lotsofpulp]

> Good luck setting up a system that can only discriminate using some signals and not others.

This is the current system.

[thwarted]

And an AI based system wouldn't correct that, it would only make it even more opaque.

[jandrese]

The requirement isn't to avoid discrimination, it is to not get caught. That somewhat opaque "AI" layer is great for that.

[CydeWeys]

And if it's actually systematically charging e.g. a specific minority more than other people, it will get caught in a hurry and end up being hugely costly for the company.

This kind of stuff is easy to catch. A single person typing some different parameters into an insurance quote webpage can catch it.

[BlueTemplar]

Until you are forced to explain exactly how your helper algorithm came to that conclusion, explaining the logic and calculations step by step in easy to understand language... (With the "I can't" not being an acceptable answer.)

[tomrod]

Nah, there are some nice metrics to capture disparate impact between categories. Check out Microsoft's fairlearn library some time.

[thwarted]

It's because the Departments of Insurance have to understand the price formulas. Neural networks are infamously hard to interpret, so we would have to reform regulations before we can use neural nets.

I'd like to know that the methodology is understandable and defensable and correctable, and having "an AI startup" disrupt with neural networks isn't going to do that. At best it will just be another excuse used to justify the state of the industry, "the computer said it so it must be right". Reforming regulations so it can be made even less transparent is not the way to go.

[nerdponx]

What's interesting though is that while pricing is strictly regulated, underwriting is significantly less regulated, at least in P&C commercial insurance. Insurance companies have been exploring the use of ML and AI for that task since at least 2017, when I got a job doing precisely that.

Also, things like machine learning for image recognition in claim photos, satellite data, etc. has also been in use for at least the same amount of time.

I believe the Lemonade renters insurance product also does some kind of "AI" claims processing. I wouldn't know what that looks like, my focus when I was in insurance was solely in underwriting.

[phonon]

> the numbers are not publicized because they don't want competitors to have that info.

What do you mean? Pricing is all publically available (sometimes not all the details that feed into the model that create the pricing tables.) You can search SERFF by carrier, by line, by State, and read the actuarial filings.

Most of the time, pricing is refined by looking at prior year(s) losses, and adjusting. You go to the State, explain how much you've been losing, and they review. All that correspondence is public as well.

[wolverine876]

I'm not sure what that means: How does that explain the widespread and large price increases, and the GP's experience?

[tomrod]

> Why doesn't an AI startup just disrupt the insurance industry?

More than this, it's a fundamental misunderstanding of what AI is and what it can do to ask this sort of question.

Best thing I've seen come on the market was Root, based in Columbus and founded by a former Finance director from Nationwide insurance. It used your cell phone to send telemetry signal to classify your driving behavior.

[gzer0]

Shamelessly greedy auto insurers like Progressive and Travelers are raking in record profits and enjoying sky-high stock prices, with Travelers even surpassing a $100 billion market cap, yet they still have the audacity to gouge policyholders with double-digit rate hikes up to 45%. If payouts truly exceeded premiums during the pandemic as these corporate behemoths claimed, how can they now be pocketing their fattest profits ever after the extreme hikes? The simultaneous jackpot profits and outrageous increases in what people pay expose the insurers' justifications as bald-faced lies. The industry giants are clearly bamboozling regulators and customers simply to boost their already-soaring income and profits at regular folks' expense. Their profiteering tactic: fabricated reasons to hike rates exorbitantly no matter what the economic reality [1].

This needs to stop. We need change.

[1] https://www.wsj.com/finance/insurance-companies-profits-stoc...

[tacocataco]

Is there a cheaper insurance company then these two?

[mint2]

The cost is due to the increasing repair costs to other people vehicles, not mainly your own. You also don’t have to get collision and comprehensive coverage, or at least not with a low deductible. Then you’re really just paying for the damage you cause to others and in that case your vehicle cost doesn’t mean anything at all.

Also, not sure your state or credit score but if you’re not in CA you’ll need good credit to get good rates. The only way to change that is government regulation.

Also if you’re getting the same rates from different places, it sounds like you’re being quoted the same company not different companies. If you aren’t going directly to the actual insurance companies website, that’s what’s happening.

[tomrod]

> The cost is due to the increasing repair costs to other people vehicles, not mainly your own.

That doesn't sound right to me. That would mean only the liability component is increasing in cost, but aren't the percentages being applied across the board?

[tpmoney]

Aren't most insurance rates / rate ranges set by the states? And any further variance is down to the actuarial tables? It seems pretty reasonable that most of your quotes would be within a few dollars of each other because they're all insuring the same risk, in the same location, under the same legal framework.

[kirse]

Aren't most insurance rates / rate ranges set by the states? And any further variance is down to the actuarial tables?

If that's true, I certainly couldn't find a table on allowable rate ranges when I did some basic research on pricing and what factors influence it. Certainly open to being schooled on how auto insurance works.

[phonon]

It's all publically available.

Filings are done through the SERFF system.

So Google SERFF and say "NY". (which will take you to https://filingaccess.serff.com/sfa/home/NY )

Then search by carrier, line of business etc. You want "rate" filings. You will find a report by an actuary, lots of justification explaining price changes, correspondence between the company and regulators asking/answering questions, details on how the rate changes will affect current customers, etc.

SInce most rate filings are to adjust current in force rates, they don't always repeat all the underlying details. With a little more effort you can look up initial rate filings, and they will walk through methodologies in more detail.

Once those prices are filed, they are locked in (for consumer types of insurance). Companies can't deviate in any way. (including giving unauthorized discounts).

[kirse]

This is great and really well organized, thanks for sharing!

[switch007]

I see lots of people are just parroting insurance PR of “repair costs are up”. I’d love to see the data and see if it justifies the hikes in insurance costs I’d also love to see the average repair cost by part, broken down by whether it’s the insurance company paying or an average Joe privately

[Scoundreller]

People choosing to drive more expensive (and physically punishing in the event of a collision) vehicles is some part of it. But insurance companies like that, so they're not about to include that in their PR script.

[phonon]

Auto insurance pricing is already very heavily regulated, by State. Pricing and underwriting models are public (Search term is SERFF + "State"). The fact is that costs continue to increase for a variety of reasons.

State Farm, for example, lost over $14 Billion last year, mostly from their Auto insurance line. Payments related to losses were 95.2% of the premium they collected, resulting in them having an overall -17% profit margin in that Line.

https://www.carriermanagement.com/news/2024/03/01/259296.htm

[sroussey]

Insurance is based on the cars you may hit that are not your own. Prices have been going up. So not surprised.

[akira2501]

Insurance is based on the coverage I purchase. Are you saying the insurance company is instead selling me an unlimited amount of liability based on the price of _other_ cars and not the $50k of coverage that I selected when I bought the policy?

How is that justified? $50k is $50k.

[mattkrause]

Perhaps it would make more sense to think of it as buying “up to $50k”;they’re certainly not paying out the whole amount every time.

If more expensive cars leads to more expensive claims on average, the price of insurance might reasonably go up even if the worst-case exposure is the same…

[akira2501]

It does somewhat but that coverage also extends to medical injuries that I may cause. Those costs have been skyrocketing for years without seeming like they made a similar impact in insurance prices.

I guess underwriting is less a game of building an appropriate liability shield but undercutting that liability shield as much as is profitable without at the same time bringing the company into insolvency.

I had always wished the idea of "open source" would have translated to some of these industries. Particularly given the level of technology available, instead of making the system easier to use and more transparent, they've made the easier to manipulate while blinding the consumer to any part of the process.

[Ekaros]

I wonder if the spike in prices of used cars have also affected this. If average "book value" of car has gone up, then the write off cost has also gone up substantially. So cars might be same, but their value is now substantially higher, while still being under the 50k.

[Scoundreller]

Used cars went up in value because new cars went up in value. There's no sudden interest in driving used.

[seanmcdirmid]

Liability insurance is based on other people’s cars. Comprehensive and collision is based on your own car.

[SoftTalker]

It's based on a whole lot of things. Drivers of Ford Mustangs may be involved in more accidents than drivers of Toyota Corollas. The number of miles you drive, and for what purpose, and your personal accident history, and your age and sex and marital status and whether you live in an area with snow and ice in the wintertime or not, all factor in to the rate you are charged.

[xapata]

Liability is more about medical costs, no? If it were bounded to vehicle cost, I'd self-insure.

[seanmcdirmid]

I’m sure car insurers pay out significantly more for vehicle damage than person damage. Most accidents don’t involve harm, but body shops are getting expensive. For WA:

> In 2019, there were 45,524 reported car accidents in Washington State. Although 32,106 resulted in no injuries, 325 were fatal and 973 resulted in serious injuries.

https://www.weierlaw.com/dealing-with-an-auto-accident-in-wa....

[xapata]

I'd bet that the median claim is quite different than the mean claim, because the outliers are so large. Much like the "shocking" statements you hear about wealth distribution -- the largest 10 are bigger than the bottom 50% or similar. That's how log-normal distributions work. Though of course the Gini coefficient can vary.

[bombcar]

The first dollar of insurance coverage is the most expensive, because any claim hits it.

Going from $100k to $2m is often quite cheap, comparatively.

[xapata]

It seems like the ideal plan is a high-deductible with no maximum, like catastrophic medical coverage.

[seanmcdirmid]

The number of claims over $100k are much less frequent, which is why it is cheaper to raise your cap.

[Marsymars]

I've wondered what happens if I have an at-fault collision where I total a hypercar whose value exceeds my maxed-out $2 million liability coverage. Can the car owner come after me for the difference?

[toast0]

Yes, you're ultimately liable for damages you cause.

I would expect your insurance to ask the damaged party to release you from further liability as a condition of accepting settlement at the coverage limits, but if the damages are significantly over the coverage limits and it seems likely that they could significantly collect on a judgement beyond your coverage, it's a possibility.

Umbrella insurance can go up to much higher limits ($2M is maybe already be an umbrella policy), sometimes up to $10M is easy to get, and depending on your insurer, often the upper millions are much less expensive. The tail risk is pretty small. If you're worried about it, may as well ask for quotes at $5M and $10M.

[Scoundreller]

> Liability insurance is based on other people’s cars.

This is what I dislike about insurance. If someone hits my (hypothetical) $100k car and ruins it, I win $100k, but if someone hits my $1k car, I only win $1k.

Yet the person that hit me did precisely the same action/error.

[eiderman]

A big problem at the lower end is that insurance companies don't value cars based on their utility. I have a well maintained older car that is reliable and I trust the work that has been done, but it would be valued at around $2k by insurance. In order to buy a car with similar reliability would be closer to $5k. If someone else hits my car, it will be probably totaled at current repair prices and so I will have lost ~$3k.

[Scoundreller]

Indeed, it doesn't take much damage for the insurance company to declare a low-end vehicle a total loss and salvage it instead of repairing. Could be just cosmetic damage and you find yourself in that problem.

As a result, I don't pay for coverage for my own vehicle in case I'm at fault. My jurisdiction now lets me opt-out of repair coverage others are at fault, but I couldn't stomach that. I think it's just for rental car cos that have their own repair facilities and to avoid ever getting a salvage title.

[kelnos]

Why do you dislike that? The purpose of insurance is to help protect against losses. If you don't have a $100k car, you can't lose it.

And this is reflected in your insurance premium. The cost to insure your own car is lower if you have a less expensive car.

I do, however, think it's a bit unfair if you have to pay more for liability insurance because other people have chosen to buy more expensive cars.

[Scoundreller]

> think it's a bit unfair if you have to pay more for liability insurance because other people have chosen to buy more expensive cars

Yes, this. You can opt-out of insurance for your own vehicle if you want, but generally required to buy some minimum for everyone else's property that might be involved.

[lotsofpulp]

Insurance is not a punitive fine or lottery. If someone drives into your house and causes $100k in damage, you would also get $100k (assuming the minimum legal coverage is that high, which it might very well not be in many or even all states).

I specifically recall New Jersey letting poorer people drive “insured” by letting them purchase insurance for effectively fender benders, and if they caused more damage, good luck pursuing them.

[Scoundreller]

> Insurance is not a punitive fine or lottery

It functions as one, regardless of intentions.

You could also look at this the other way: the person driving the rust-bucket with 0 functioning airbags might win more injury compensation than the individual driving something solid with 9 airbags and walks away.

[Horffupolde]

That’s called moral hazard.

[vkou]

The point of insurance is to make you whole, not to make you better off.

If it did, you'd have more incentives for insurance fraud.

(Also it's the other guy's insurance that pays for it, and if the insurance industry disappeared overnight, and you had to sue for damages directly, no judge would award you more than the damages you sustained. (For an honest accident.))

[jrockway]

This doesn't bother me. It's about making you whole after random events. It's better to imagine a meteor hitting your car. If it turns your $100k car into a crater, you have a $100k car afterwards. If it turns your $10k car into a crater, you have a $10k car afterwards. If the meteor hits a big open field, you still have your car. It's like meteors no longer exist, so you no longer need to worry about them. That's all insurance is.

[dylan604]

The price to repair cars are also going up which is making the payout claims cutting into profit margins. So the solution is obvious

[dools]

I wouldn’t be surprised if this was caused by concentration in the under writing market. You might find a lot of insurance companies at a thin retail layer on top of a very small wholesale layer.

[mschuster91]

> I vent my frustration to a few agents about the yearly rate increase insanity and they all shrug, give their non-empathetic "I understand" telephone script and blame it on the "system" calculating the prices and make some useless excuse about inflation.

Thing is, they're not wrong. The cost of accident coverage has gone up, actually way beyond inflation - assume you hit a Tesla and it sits around 9 months until Tesla can be arsed to get spare parts, your insurance will be billed for the damage itself as well as a loaner car for the counterparty. And damage repairs themselves have gotten more expensive as well: what used to be a simple bend that your everyday farmer neighbour could fix with the basic tools in his garage all while being drunk out of his mind isn't even possible with modern cars made from aluminium or carbon-fiber composite, not to mention all the tech like distance sensors that go into modern fenders which has to be replaced and carefully recalibrated.

On top of that come all the issues with regular inflation (e.g. labor cost, real estate rental for shops) and the aftereffects of the covid pandemic and its supply chain shocks (there's still a massive number of car carcasses that couldn't be completed and now get priority in parts delivery).

[1] https://www.carscoops.com/2023/11/tesla-owners-stuck-waiting...

[Scoundreller]

> all the tech like distance sensors that go into modern fenders which has to be replaced and carefully recalibrated

Weren't all those sensors supposed to reduce collisions, your fault or by others'?

[bombcar]

Even if they cut collisions by 50% or more, if they more than double the cost of the ones that still happen, it’s a wash.

Still worth it, likely, because saving lives doesn’t really have a dollar amount (cue fight club) - but certainly there.

Old steel bumpered cars would have zero costs at 0-5 mph collision; plastic breaks even at nearly zero. But the newer car safety is much higher.

[CydeWeys]

I haven't had auto insurance in nearly ten years (because I don't own a car myself), and I gotta say, this is increasingly saving me more and more money over time. Everything about cars in the US is just getting so expensive (including the cars themselves); I wonder when it will start collapsing?

[vkou]

You're not paying to insure the car, you're paying to insure yourself against a crash where you land someone with a 5-million dollar hospital and lifelong disability bill.

The price of a car is trivial compared to the price of a person.

[lotsofpulp]

I don’t think I have seen more than $500k liability coverage, at least not in the drop down menus when shopping for auton liability insurance.

$5M is firmly in umbrella insurance or suing the at fault driver territory.

[bombcar]

They won’t sell you umbrella until you max the other policies, but at some point you’re not paying against future judgements you’re paying against the future insurance company’s lawyers defending the case.

[nostrademons]

Labor market as well. Many large companies shell out for a salary survey of what other peer companies are paying for similar roles, and then set their wages based on that. That's price fixing. If it were a person calling around to all your competitors and saying "Hey, what are you paying for a senior SWE, we'll pay that too", it'd be illegal.

[nerdponx]

This might be a different form of price-fixing.

You know how big-box retail stores will price match products? That's in order to keep tabs on competitors' prices, and to pose a credible threat of starting a price war. Keeping the peace means keeping prices elevated above marginal cost.

Insurance companies rolling out online rate comparison tools has a similar effect.

[fefefeffffeef]

It sounds like you're ignoring quite a few things. First and foremost that car insurance covers a heck of a lot more than the cost of your car. It can also cover

- the cost of the other person's car

- your healthcare

- the other person's healthcare, including passengers in each car

- damage to other property like buildings and equipment that people drive into

- lost wages if you're too injured to work

- and a lot more.

The cost of a crash can be many times higher than the cost of your car. Of course maybe you only have liability insurance, which frankly is not a great idea and I would recommend getting comprehensive coverage if you can.

[kelnos]

Insurance is usually regulated and prices (and increases) are set and approved by a governmental body, at least in the US.

That's the more likely reason for similar insurance prices from different providers.

[dclowd9901]

Hate to say it, but 1) if your car is involved in just about any kind of accident, it will be considered completely totaled and 2) most cars will be in some kind of accident.

I think the numbers accurately reflect what insurance companies will expect to pay out for claims. It’s partly due to the nature of vehicle design now and partly due to the cost of repair.

[Ekaros]

I wonder if they actually have that much margin to give discounts... Or are the prices already at or near lowest possible level... After all outgoings must be lower than incoming in on sufficiently long term. Has something pushed the pay outs too high, compared to what is being paid.

[jethro_tell]

I'd expect the cost of cars, which is has become tethered to 'monthly payment' instead of actual cost.

[iudusuux]

Not quite right. Auto insurance is a commodity. They don’t have price fixing per the same way housing does. Also they are heavily regulated and their prices probably have to be approved by your state.

[ensignavenger]

As another anecdote, I get very different quotes for auto insurance from different companies.