Auto insurers may raise premiums for Americans after hurricanes

Back-to-back Hurricanes Helene and Milton damaged thousands of cars, dealing a severe blow to the multi-billion-dollar auto insurance industry as claims pour in. This could also lead to premium hikes in flood-prone regions in the US.

In Florida alone, over 80,000 auto-insurance claims have been filed.

These storms are costing auto insurers a lot of money. Moody’s estimates that auto losses from the two hurricanes could reach $5 billion, out of a total of $30 to $50 billion in insured damages.

They opine that people living in areas prone to natural disasters might see car insurance prices increase.

While inflation in car insurance costs has slowed slightly, it’s still increasing faster than overall inflation.

One insurer, Progressive, reported $726 million in vehicle losses from both storms. They have been raising auto insurance rates over the past few years. On average, rates went up 16% over the last year.

Though the hurricanes hurt the insurance company, analysts expect it to recover and continue making profits in 2024. Rising premiums over recent years have boosted profits.

Several insurance companies, including Progressive, have started to focus on expanding their customer base despite the recent storm-related losses.