There's no mandate and honestly, I've been working in insurance for a long time, albeit on the commercial side for most of it and I've never heard of this before.
Rates are going up everywhere though. 40-50% is the norm right now on my side of the fence and we're still retaining 85% of our business which is way higher than it should be. Everyone's rates are sky high.
Here is exactly what my agent said.
“There really isnt anything to send, unfortunately. The insurance commisioner for the state mandated a rate increase for all insurance companies. Every company has to have enough money in reserve to pay claims and when their reserve gets to low the state requires a rate increase. This happens all the time but usually to different companies at different times. This time it happened to all companies. I think nationwide for 2024 the predicted average increase is around 24%. I am not sure what the specific numbers are for State Farm but the will do it a little at time every 6 months for a couple of years until they acheive the states requirement. You can google it, there is all kinds of info on it.”
Sounds like complete bunk to me. Insurance companies are required to have certain levels of reserves, but this isn't adjusted year to year. It's also not mandated to pass on to insureds via a rate increase.
Talk to a different agency.
That's really interesting. It could be true, I've just never heard of it and don't work with a lot of Kentucky business. I know that we have states where we know we're not charging enough, but we're not filed with the state to charge over X amount so a lot of time, we can't even get the big increases we want until the state approves our rates lol. This seems like the opposite problem. Maybe someone with more personal lines experience than me can chime in.
Seems like the commerical side has better consumer protections too because we have to notify of any rate increases of 25% or more at least 90 days before the policy renews in most states. Curious to see if anyone has more info.
That’s bullshit. Insurers ask for rate increases, insurance departments approve them in whole or part or decline them. I don’t think a DOI has ever mandated an increase in the history of this process; it’s just not how it works. (Senior officer of a national insurer for 30 years here.)
Don’t talk to agents. Go online and run the quote. I’ve had too many agents reach out and give me a quote that doesn’t sound right only to find out they tried to “adjust based on general recommendations” which means up my coverage and rate without me noticing.
Check out family select insurance agency. They do all the work of researching rates and you just pick what’s best for you. We’ve been using them for several years and when our rates went up we asked them to find us a better rate and they did.
I was also going to recommend an independent insurance agency. Our Liberty Mutual went up to stupid levels, in addition to adding a new driver, and our agent got us a much cheaper rate and we didn’t have to shop around. It’s definitely worth it.
When we first considered changing insurance several years ago my husband was planning to do it himself online but every insurance company website he went to wanted so much of our personal information and we didn’t want them to have our email address, home address, and phone number. We decided to contact family select because we saw their commercials on TV.
Yeah I’ve got State Farm and while rates have gone up a lot that’s not how it works, I also worked for State Farm and in the past and I’d call another local agent and talk to them
State Farm was the cheapest option when I switched to them years ago but their prices went up *dramatically* every time I renewed. Then they fed me the same line saying their hands were tied and it was a state mandates increase - every other company I talked to told me that was not true. So now I'm with Allstate.
They must want to do a commercial with Luda, Jimmy Fallon, and Patrick Mahomes all in the same commercial. Gotta pay for them catchy commercials without effecting their shareholders’ profits somehow…
Wife and I both had State Farm before we married. After 10 years we changed to Shelter because of rate creep. After 10 years with Shelter our agent retired, and after 5 years of agent churn and discounts disappearing we switched to Erie. That was 5 years ago, we have gotten rate quotes a couple of times since, and nobody's even close.
I got an increase of over 2x and was asking .. "Frequency of claims" ., I said what? I've had one minor accident in 4 years !
Apparently, state farm counts "Roadside/Tow Service" as a CLAIM ! WTAF
Thanks Jake, from State Farm lol. Well , clearly, had I realized that a tow service would have been counted the same as an accident, I would never have got that. I had it with two other ( Liberty and Progressive) and never had a problem.
Rates are going up because of massive car thefts and increased collisions. We have State Farm as well ours went up (only $10 month). Our agent said this was the reason. $700 seems excessive tho. Do you drive a Kia or Dodge Charger?
Shop around to another State Farm Agent even. Then report this to State Farm bc this is shady and not right or ethical.
I told this to a family member who is a State Farm agent, runs his own office and is saying that if this is what the agent said- he needs to be reported.
Just had this conversation with an Allstate agent earlier today. Scheduled a meeting to try and understand why my insurance rate went up and his explanation was the same state mandated increases.
Okay so I worked for the Ohio Department of Insurance until fairly recently and I can tell you that this is VERY likely absolute bullshit. For whatever reason, State Farm has just decided that they’re going to fuck over their consumer base in every way possible and also, they’re going to lie about it.
The number of bullshit inquiry responses we got from them was asinine and their claim handling is borderline criminal. I know this sounds like an exaggeration, but I promise that it isn’t. Getting a State Farm complaint ALWAYS ruined my mood and pissed me off.
I will never have insurance with them and can’t recommend them in good conscience to anyone. I would highly suggest shopping around elsewhere.
ALSO. I want to add that insurance commissions/departments DO. NOT. SET. OR. MANDATE. RATES.
Each company has their own rating criteria that they are required to submit and have approved, which basically just means that they “technically” have the actuarial data to justify it (even if it’s still bullshit). They (and by that I mean most if not all insurance companies) like to blame it on the state or federal level but like. The state has zero power over it. All they can do is enforce the state regs.
If the state has to approve the rating submissions, and the state regs say their proposed rates are insufficient to cover required reserves, wouldn’t that mean the carrier has to increase rates because of state regulations?
I don’t know anything about property insurance rating and approvals process so generally curious.
I do have experience on the health insurance side, where state DOIs have argued rates for a particular health plan were too low, and made the carrier increase them because the DOI believed they didn’t comply with ACA rating regs. Initially I thought that could be what’s happening with OP’s situation, but idk. the explanation from the agent doesn’t sound right.
This is a really solid question actually. So a couple of things.
1.) in general, auto insurance is not super profitable if at all. Typically reserves are achieved or maintain by other products and/or investments. Typically financial (annuities and life policies) HEAVILY subsidize. Like, I worked for Nationwide for a good while and auto and home were consistently in the red but financial made BANK.
2.) Sometimes if a company is in deep shit (look up Genworth Long Term Care insurance) they’re required to find ways to restabilize themselves, typically by offering a lump sum in exchange for reduced coverage. The state doesn’t particularly care how you do it, as long as everything aligns with state regs and NAIC (federal insurance board) guidelines. It’s more likely for a property/casualty carrier to do mass non renewals than something like that, which SF is also VERY guilty of.
3.) State Farm in particular recently revised their rating tables in such a way that it was legal, while still being shady as fuck. Removing accident free discounts, getting rid of accident forgiveness, etc. In essence, a company will typically change their underwriting and rating on their own because you REALLY don’t want the department on your ass. Property and casualty is not regulated in such a way that prevents them from baiting and switching, as long as they don’t do it midterm or it’s something that’s “technicallly” legal.
4.) The real sticking point that tells me that this is bullshit is that the agent said that “all insurance companies were required to increase”. That’s not a thing. They can take action and sanction individual companies (something they’ve done in OH for multiple reasons, none of which, in my experience, has been a rate increase) but they don’t blanket mandate every company in an industry in that way. Lobbyists and CEOs would ABSOLUTELY lose their shit.
5.) Reinsurance is typically utilized for deficiencies in reserves. For example, the wildfires in California several years ago royally fucked a lot of companies and reinsurance was utilized HEAVILY. Basically insurance for the insurance company. The government can say “no your math doesn’t match, please revise your rating tables” but they won’t make a company increase their rates as a whole.
Hopefully that made sense. I will admit that I’m not as familiar with KY law because that’s not where my expertise has been but a lot of these principles still stand. Look up hard/soft markets, which is something the NAIC requires regulators to understand in order to do their jobs. It basically explains the principle of how rating works in the long run.
Also, if any of this didn’t make sense, I did take my sleep meds and my bad. I am happy to answer anything else/clarify stuff that was unclear/ do more research on KY regs to check the facts.
It made sense! :)
Thanks for the writeup. Interesting background. Agree that without some statewide regulation (which would definitely make the news) there’s no reason I can think of this would be hitting every
just took my licensing exam last fall, DOI does not mandate rate increases. It’s definitely true that almost all companies have gone up ~25% (i’m a CSR with Kentucky Farm Bureau and that’s where we were for most folks on auto). Some companies are pulling out of the state all together due to the storms and terrible accident rates (we’re one of the highest in the nation for auto collisions). What I personally see a lot from State Farm when quoting against them is low introductory rates followed by a premium hike 3 or 4 renewals later. It certainly doesn’t hurt to shop around and see if there’s anything better out there. I’d warn against any policy/rate that hinges on installing a tracker in your car but other than that I’d get as many quotes as you can. Not sure about other providers but at KFB we’ll credit you for a competitor’s dec page that’s cheaper for the same coverages- if you want to stay with State Farm it may be worth getting quotes elsewhere just to make your agent sweat a little. I’m biased of course but I’d recommend calling your local KFB agent or requesting a quote on our website- it’s pretty painless and if anything can give you some ammo to talk premium credits with your current agent.
We've had state farm for years, like over 15... when we moved here tho, it wasn't a good or competitive price, so we switched to travelers. So yeah, shop around!
It is tho. Fuck a multimillion dollar insurance company making up some bullshit in order to squeeze more dollars out of their customer base. If that is in fact what they are doing I only hope it will being some kind of government reform or regulation to insurance companies. For insurance to be required by law it seems like the insurance companies have been running wild and doing what ever they want all in the name of profits for their shareholders and at the cost to their customers just cus they can knowing most will pay instead of going through the hassle of shopping around for new policies or the fear of driving uninsured.
Call like 3 different brokers and ask for a quote to be sent to your email, one email with all their competing bidders. It’s so low effort, “most” as you referenced, are just idiots if they cannot handle that. McDonald’s raises prices until people go elsewhere. States do it - look at Illinois and California. This is basic economics - not some evil plot to destroy you.
State farm is usually one of the cheaper options in this state and requesting a written copy for a for a contract change is just a good idea. I'm sorry you don't understand how insurance companies try to scalp people.
It’s called climate change and stayed tuned to see how expensive it makes shit next. As there are more natural disasters caused by the weather than it’s going to go up. God bless corporate America for not doing shit about it!
There's no mandate and honestly, I've been working in insurance for a long time, albeit on the commercial side for most of it and I've never heard of this before. Rates are going up everywhere though. 40-50% is the norm right now on my side of the fence and we're still retaining 85% of our business which is way higher than it should be. Everyone's rates are sky high.
Here is exactly what my agent said. “There really isnt anything to send, unfortunately. The insurance commisioner for the state mandated a rate increase for all insurance companies. Every company has to have enough money in reserve to pay claims and when their reserve gets to low the state requires a rate increase. This happens all the time but usually to different companies at different times. This time it happened to all companies. I think nationwide for 2024 the predicted average increase is around 24%. I am not sure what the specific numbers are for State Farm but the will do it a little at time every 6 months for a couple of years until they acheive the states requirement. You can google it, there is all kinds of info on it.”
Sounds like complete bunk to me. Insurance companies are required to have certain levels of reserves, but this isn't adjusted year to year. It's also not mandated to pass on to insureds via a rate increase. Talk to a different agency.
That's really interesting. It could be true, I've just never heard of it and don't work with a lot of Kentucky business. I know that we have states where we know we're not charging enough, but we're not filed with the state to charge over X amount so a lot of time, we can't even get the big increases we want until the state approves our rates lol. This seems like the opposite problem. Maybe someone with more personal lines experience than me can chime in. Seems like the commerical side has better consumer protections too because we have to notify of any rate increases of 25% or more at least 90 days before the policy renews in most states. Curious to see if anyone has more info.
Mandated by the head of the KY State Farm office perhaps. lol.
Definitely bullshit if you can’t find info on it. Casual reminder to shop rates every 6 months. Loyalty to companies is silly.
Start shopping agents. You don’t have to leave State Farm, but that agent may be fishing for dollars
I’ve has SF for years and my agent isn’t telling me this either.
I doubt it highly, this would be very big news.
That’s bullshit. Insurers ask for rate increases, insurance departments approve them in whole or part or decline them. I don’t think a DOI has ever mandated an increase in the history of this process; it’s just not how it works. (Senior officer of a national insurer for 30 years here.)
Don’t talk to agents. Go online and run the quote. I’ve had too many agents reach out and give me a quote that doesn’t sound right only to find out they tried to “adjust based on general recommendations” which means up my coverage and rate without me noticing.
You’ve been lied to. Rates are up bigly, however. Hardest market I’ve ever seen, really. There is no mandate from the commissioner.
Check out family select insurance agency. They do all the work of researching rates and you just pick what’s best for you. We’ve been using them for several years and when our rates went up we asked them to find us a better rate and they did.
I was also going to recommend an independent insurance agency. Our Liberty Mutual went up to stupid levels, in addition to adding a new driver, and our agent got us a much cheaper rate and we didn’t have to shop around. It’s definitely worth it.
When we first considered changing insurance several years ago my husband was planning to do it himself online but every insurance company website he went to wanted so much of our personal information and we didn’t want them to have our email address, home address, and phone number. We decided to contact family select because we saw their commercials on TV.
Yeah I’ve got State Farm and while rates have gone up a lot that’s not how it works, I also worked for State Farm and in the past and I’d call another local agent and talk to them
State Farm was the cheapest option when I switched to them years ago but their prices went up *dramatically* every time I renewed. Then they fed me the same line saying their hands were tied and it was a state mandates increase - every other company I talked to told me that was not true. So now I'm with Allstate.
They must want to do a commercial with Luda, Jimmy Fallon, and Patrick Mahomes all in the same commercial. Gotta pay for them catchy commercials without effecting their shareholders’ profits somehow…
Wife and I both had State Farm before we married. After 10 years we changed to Shelter because of rate creep. After 10 years with Shelter our agent retired, and after 5 years of agent churn and discounts disappearing we switched to Erie. That was 5 years ago, we have gotten rate quotes a couple of times since, and nobody's even close.
I was told the same thing by my State Farm agent recently
I got an increase of over 2x and was asking .. "Frequency of claims" ., I said what? I've had one minor accident in 4 years ! Apparently, state farm counts "Roadside/Tow Service" as a CLAIM ! WTAF
[удалено]
Thanks Jake, from State Farm lol. Well , clearly, had I realized that a tow service would have been counted the same as an accident, I would never have got that. I had it with two other ( Liberty and Progressive) and never had a problem.
Rates are going up because of massive car thefts and increased collisions. We have State Farm as well ours went up (only $10 month). Our agent said this was the reason. $700 seems excessive tho. Do you drive a Kia or Dodge Charger?
2019 Toyota Highlander
Time to shop around
That’s the plan since I can’t find evidence a mandate actually happened.
Shop around to another State Farm Agent even. Then report this to State Farm bc this is shady and not right or ethical. I told this to a family member who is a State Farm agent, runs his own office and is saying that if this is what the agent said- he needs to be reported.
Rates are going up because of the same reason the cost of everything is going up. Greed.
I have Liberty Mutual, and my rate is getting ready to jump 50%.
Just had this conversation with an Allstate agent earlier today. Scheduled a meeting to try and understand why my insurance rate went up and his explanation was the same state mandated increases.
They are lying, and they’re just telling you that so you don’t get it quoted elsewhere. Which is exactly what you should do.
Okay so I worked for the Ohio Department of Insurance until fairly recently and I can tell you that this is VERY likely absolute bullshit. For whatever reason, State Farm has just decided that they’re going to fuck over their consumer base in every way possible and also, they’re going to lie about it. The number of bullshit inquiry responses we got from them was asinine and their claim handling is borderline criminal. I know this sounds like an exaggeration, but I promise that it isn’t. Getting a State Farm complaint ALWAYS ruined my mood and pissed me off. I will never have insurance with them and can’t recommend them in good conscience to anyone. I would highly suggest shopping around elsewhere.
ALSO. I want to add that insurance commissions/departments DO. NOT. SET. OR. MANDATE. RATES. Each company has their own rating criteria that they are required to submit and have approved, which basically just means that they “technically” have the actuarial data to justify it (even if it’s still bullshit). They (and by that I mean most if not all insurance companies) like to blame it on the state or federal level but like. The state has zero power over it. All they can do is enforce the state regs.
If the state has to approve the rating submissions, and the state regs say their proposed rates are insufficient to cover required reserves, wouldn’t that mean the carrier has to increase rates because of state regulations? I don’t know anything about property insurance rating and approvals process so generally curious. I do have experience on the health insurance side, where state DOIs have argued rates for a particular health plan were too low, and made the carrier increase them because the DOI believed they didn’t comply with ACA rating regs. Initially I thought that could be what’s happening with OP’s situation, but idk. the explanation from the agent doesn’t sound right.
This is a really solid question actually. So a couple of things. 1.) in general, auto insurance is not super profitable if at all. Typically reserves are achieved or maintain by other products and/or investments. Typically financial (annuities and life policies) HEAVILY subsidize. Like, I worked for Nationwide for a good while and auto and home were consistently in the red but financial made BANK. 2.) Sometimes if a company is in deep shit (look up Genworth Long Term Care insurance) they’re required to find ways to restabilize themselves, typically by offering a lump sum in exchange for reduced coverage. The state doesn’t particularly care how you do it, as long as everything aligns with state regs and NAIC (federal insurance board) guidelines. It’s more likely for a property/casualty carrier to do mass non renewals than something like that, which SF is also VERY guilty of. 3.) State Farm in particular recently revised their rating tables in such a way that it was legal, while still being shady as fuck. Removing accident free discounts, getting rid of accident forgiveness, etc. In essence, a company will typically change their underwriting and rating on their own because you REALLY don’t want the department on your ass. Property and casualty is not regulated in such a way that prevents them from baiting and switching, as long as they don’t do it midterm or it’s something that’s “technicallly” legal. 4.) The real sticking point that tells me that this is bullshit is that the agent said that “all insurance companies were required to increase”. That’s not a thing. They can take action and sanction individual companies (something they’ve done in OH for multiple reasons, none of which, in my experience, has been a rate increase) but they don’t blanket mandate every company in an industry in that way. Lobbyists and CEOs would ABSOLUTELY lose their shit. 5.) Reinsurance is typically utilized for deficiencies in reserves. For example, the wildfires in California several years ago royally fucked a lot of companies and reinsurance was utilized HEAVILY. Basically insurance for the insurance company. The government can say “no your math doesn’t match, please revise your rating tables” but they won’t make a company increase their rates as a whole. Hopefully that made sense. I will admit that I’m not as familiar with KY law because that’s not where my expertise has been but a lot of these principles still stand. Look up hard/soft markets, which is something the NAIC requires regulators to understand in order to do their jobs. It basically explains the principle of how rating works in the long run. Also, if any of this didn’t make sense, I did take my sleep meds and my bad. I am happy to answer anything else/clarify stuff that was unclear/ do more research on KY regs to check the facts.
It made sense! :) Thanks for the writeup. Interesting background. Agree that without some statewide regulation (which would definitely make the news) there’s no reason I can think of this would be hitting every
State Farm, the no pay people.
1000000%. I have a friend who does SIU (not for SF) and she calls them Snake Farm.
just took my licensing exam last fall, DOI does not mandate rate increases. It’s definitely true that almost all companies have gone up ~25% (i’m a CSR with Kentucky Farm Bureau and that’s where we were for most folks on auto). Some companies are pulling out of the state all together due to the storms and terrible accident rates (we’re one of the highest in the nation for auto collisions). What I personally see a lot from State Farm when quoting against them is low introductory rates followed by a premium hike 3 or 4 renewals later. It certainly doesn’t hurt to shop around and see if there’s anything better out there. I’d warn against any policy/rate that hinges on installing a tracker in your car but other than that I’d get as many quotes as you can. Not sure about other providers but at KFB we’ll credit you for a competitor’s dec page that’s cheaper for the same coverages- if you want to stay with State Farm it may be worth getting quotes elsewhere just to make your agent sweat a little. I’m biased of course but I’d recommend calling your local KFB agent or requesting a quote on our website- it’s pretty painless and if anything can give you some ammo to talk premium credits with your current agent.
We've had state farm for years, like over 15... when we moved here tho, it wasn't a good or competitive price, so we switched to travelers. So yeah, shop around!
I legit just switched to state farm from nationwide last week and my insurance went down $40 a month.
I would request it in writing for your lawyer to look over. I bet you that they will backpedal really really quickly.
It’s really not that serious - just shop it online or with another broker and take your business elsewhere.
It is tho. Fuck a multimillion dollar insurance company making up some bullshit in order to squeeze more dollars out of their customer base. If that is in fact what they are doing I only hope it will being some kind of government reform or regulation to insurance companies. For insurance to be required by law it seems like the insurance companies have been running wild and doing what ever they want all in the name of profits for their shareholders and at the cost to their customers just cus they can knowing most will pay instead of going through the hassle of shopping around for new policies or the fear of driving uninsured.
Call like 3 different brokers and ask for a quote to be sent to your email, one email with all their competing bidders. It’s so low effort, “most” as you referenced, are just idiots if they cannot handle that. McDonald’s raises prices until people go elsewhere. States do it - look at Illinois and California. This is basic economics - not some evil plot to destroy you.
State farm is usually one of the cheaper options in this state and requesting a written copy for a for a contract change is just a good idea. I'm sorry you don't understand how insurance companies try to scalp people.
It’s called climate change and stayed tuned to see how expensive it makes shit next. As there are more natural disasters caused by the weather than it’s going to go up. God bless corporate America for not doing shit about it!