How much is GEICO car insurance a month?
Why Did Geico Increase My Auto Insurance Rate for No Reason?
As a Geico customer, you’re probably used to paying a fairly attractive annual premium in exchange for your auto insurance coverage. Unlike some full-service auto insurance companies, Geico is known for charging below-market rates for its policies. Unlike many bargain-basement auto insurance companies, Geico is also known for providing responsive claims service and dispensing prompt payouts to drivers who deserve them. As such, it’s often said to occupy a «sweet spot» niche between discount and full-service providers. In addition, it enjoys excellent customer satisfaction rankings and experiences relatively low turnover rates.
However, Geico has some key drawbacks. While it’s an attractive insurer for mature drivers with stellar driving records, it’s not an ideal carrier for younger drivers with blemished driving histories. It’s known for raising accident-prone drivers’ premiums by more than many other insurance companies. As such, it has developed a reputation as a «trap» company that charges new customers low premiums to earn their business and then jacks up its rates at the first sign of trouble.
Unlike full-service providers like Allstate and State Farm, Geico doesn’t offer a blanket «accident forgiveness» discount. While it does reserve the right to overlook a single speeding ticket or at-fault accident during a five-year period, its standards for doing so are far stricter than those of its peer companies. Despite this fact, Geico specifically targets young drivers with affordable policies and clever advertising.
If you believe that Geico has unfairly increased the premiums on your policy, you’ll need to speak with one of the company’s customer service representatives. It’s unusual for an insurance company to raise its premiums without cause. In fact, most insurance companies reduce the premiums that they charge their loyal customers over time to increase customer retention rates.
If you’re unable to get a straight answer from your representative, you may wish to check with your state’s insurance regulator. Most states permit insurance companies to raise their premiums once or twice within a given calendar year. Unless they’re made on individual policyholders in response to specific incidents, these increases must be approved by the proper regulatory authorities.
To justify these rate hikes, insurance companies point to a variety of factors. These might include higher general operating costs or an uptick in the number of accidents in a particular state due to unusually bad weather conditions. Fortunately, you can fight back against such an «unfair» rate increase by shopping around for a new insurance provider.
Disclaimer
This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
Why did my Geico rate increase for auto insurance?
Have you noticed a rate increase in what you’re paying for auto insurance at Geico?
It’s not just you, and it’s not necessarily just Geico either. A study from the Bureau of Labour shows that car insurance rates went up to 50 percent between 2006 and 2016 for drivers.
It’s pretty common to see a premium hike when after an accident where you’re at fault, or after you’ve racked up a traffic ticket or two. But it’s confusing to see that you’re suddenly paying more for car insurance when you’ve never even filed claim before.
So why did you see an uptick in what you’re paying? Premium increases definitely take into account the risk you have as a driver. But there are other factors to consider, too. Let’s take a look at potential reasons behind a Geico rate increase for auto customers, as well as drivers as a whole.
Why are auto insurance rates going up for everyone?
Insurance companies are ultimately businesses that want to turn a profit. So as costs rise, so will rates.
Auto insurance companies pay out billions of dollars in claims each year. When insurance companies take a hit, they look to offset these losses with rate increases for their customers. This is done across the board, regardless of your driving record.
Why did my Geico rate increase for car insurance?
Here are a few factors contributing to why your car insurance went up:
New technology
Cars are getting more sophisticated and more expensive with each new model. Newer vehicles come with a ton of different high-tech features. Most of them are designed and put into production to make driving safer.
But these high-tech features make the cost of repairing or replacing these newer vehicles more expensive if an accident happens. Not only that, the rise in the cost of car parts has directly affected the increase in the number of auto thefts, according to the National Insurance Crime Bureau.
Rise in car accidents
Even though there’s been improvements to cars, such as safety features, car crashes are still on the rise.
According to the Institute for Highway Safety, 36,750 people died in crashes in 2018 in the U.S. This is due to a number of reasons, including distracted driving and drug and alcohol impaired driving.
The more accidents, the more potential claims that are filed for all insurance companies to pay out. This increase in costs then pushes premiums up.
Distracted driving
It’s easy to assume that distracted driving is only related to texting or looking at your phone while driving, but it also includes a lot more.
Distracted driving refers to any activity that draws your attention away from driving. That could include talking or texting on your phone, eating and drinking, reaching for an item, or changing the radio station.
And more often than not, distracted driving leads to accidents. In 2017, 3,116 drivers were killed in distracted driving incidents, according to the National Highway Traffic Safety Administration.
Accidents lead to more potential claims and overall costs for insurance companies to pay. These costs are passed on to all drivers, even those who make sure to avoid distractions while practicing safe driving.
Gas prices
When gas prices are lower, people tend to drive more. And the more time you spend driving, the bigger the chance that you’ll get into an accident. That will involve more claims, and rates can go up for everyone.
Medical costs
Medical costs are rising as claims payouts for people injured in car accidents are increasing too.
According to the Centers for Medicare and Medicaid Services, national health spending is projected to increase at an average annual rate of 5.5 percent from 2017 to 2026. As for insurance payouts for insurers, bodily injury claims increased six percent between 2012 and 2017.
When insurance companies like Geico have to pay out bigger medical costs following at-fault accidents caused by their customers, this affects all policyholders. Even those who have never been at fault or in an accident could be affected.
Extreme weather patterns
Severe weather and natural disasters are happening more frequently now. In the U.S., severe weather has been on the rise over the past couple of years with losses exceeding over $1 billion.
If there’s been a recent weather event in your area (think: hurricane, blizzard, flood, fire), this will have an affect on your car insurance rate. But it might not be noticeable right away.
When these natural disasters or severe weather events happen, this increases the number of claims in the area. To make up for this, insurance companies raise the rates for everyone.
Personal factors that affect your rate
While there are certainly things you aren’t responsible for, like severe weather, there are a few things you can change to get your rate down.
Coverage
Did you reach out to Geico and make any changes to your coverage recently? That will affect the price of your premium.
Reviewing your coverages is a good place to start when trying to lower your premium. While it’s always good to be protected, you never want to be paying for coverages you don’t need.
For example, if you’ve been driving an older car – around 10 years or older -, you can consider dropping full coverage and going with a liability only policy. Instead of paying for full coverage, you can save that money in an emergency fund and use it to repair or replace your car yourself.
Driving record
Got a speeding ticket? Filed a claim for an at fault accident? All these things will affect your premium quite a bit. While these things won’t remain on your driving record for forever, they can stay on there from anywhere between 3 to 10 years.
Make sure you’re practicing safe driving techniques to keep that driving record spotless. If you do this, it might make you eligible for the good driver discount as well. According to Geico’s website, this could give you a 26 percent discount.
Life events
Have you moved recently? Even moving just a couple blocks away can sometimes increase your rates by more than 60 percent.
There are several reasons for this, and they all have to do with your risk profile. Perhaps you moved to an area where the auto theft rate is higher. Or maybe you’ve moved to the city from where there are more cars on the road and a bigger chance for accidents. It can sometimes be as simple as there have been more claims filed in your neighborhood recently.
Credit score
It’s a controversial system, but insurance companies believe that there’s a correlation between credit score and driving behavior. So drivers with a low credit score can end up paying more than double what drivers with good credit pay. If there’s been a dip in your credit score, you may have seen this reflected in your increased premium.
Even though it’s not an overnight solution, monitoring and being aware of your credit score will help you save on car insurance in the long run. Increase your score by paying down debt and paying all of your bills on time.
New car
If you changed cars, this could’ve increased what you’re paying in monthly premiums. Different makes and models have various repair costs. And as mentioned before, newer cars have enhanced safety and security features that are costly to repair or replace.
How do I get my premium down?
The best way to get your premiums down is to make sure you’re driving safely on the road every time. If you want to brush up on your skills, you can always take a defensive driving course. Insurance companies (including Geico) often offer a discount on the course or give you a discount after completing the course.
Another option would be for you to shop around. Take this time to get multiple quotes from different insurance companies. This is the only way to ensure whether or not you’re getting the best rate possible. If you have been in an accident, this shouldn’t stop you from shopping around. In fact, insurance companies treat accidents and violations differently.
Even if the quotes aren’t drastically different, it could save you a couple bucks. And switching to another insurance provider could be the answer to getting a lower premium.
Cover will get you an auto quote in as little as five minutes. All you have to do is answer a few short questions.
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How much is GEICO car insurance a month?
Allstate and GEICO will each take in nearly $200 million in additional premium nationwide as a result of auto insurance rate increases implemented in April, according to an analysis by S&P Global Market Intelligence.
The analysis, which is based on publicly available rate filings submitted to state insurance regulators, found that Allstate had received approval for 22 rate increases across 13 states. When combined, the increases could potentially increase the carrier’s calculated premiums by nearly $195 million, S&P Global said.
GEICO was a close second, expected to realize an additional $193.4 million in premiums through 10 increases approved in the month. Georgia and Arizona drivers will be paying the bulk of the additional premium, calculated at $119.7 million and $58.5 million in those states, respectively.
The “most impactful” state premium increase will be felt in Louisiana, where about 1 million State Farm policyholders will pay an additional $95.3 million, thanks to an approved 7.2% increase, S&P Global said.
In Texas, State Farm was permitted to raise its rates 9.7%, collecting an additional $64 million.
S&P Global found two double-digit percentage increases at the state level, both awarded to Allstate. In Louisiana, drivers will see a 14.9% increase, for a $51 million rise in premiums collected. And in Virginia, a 12.1% increase will bring in an additional $42.1 million in premiums for the carrier.
Allstate, for one, has made no secret of its intention to raise auto insurance rates throughout 2022 as it reacts to an increase in the number of physical damage and bodily injury severity claims.
Allstate CFO Mario Rizzo told investors on April 29 that the carrier had increased its rates in March, on average, by 9.8% in 15 locations and “implemented 53 rate increases averaging approximately 8.2% across 41 locations since the beginning of the fourth quarter 2021.”
“These locations represent approximately 62% of 2021 Allstate brand auto written premiums,” Rizzo said. “The increase to Allstate brand total auto insurance written premiums of approximately 6.5% implemented over this six-month period will be earned throughout this year and into 2023.”
The latest rate increases build on hikes approved in the second half of 2021. According to S&P Global, rate increases approved for GEICO during the period were expected to lead to $1.06 billion in additional premium, while Progressive, Allstate, and State Farm were expected to realize increases of $363 million, $351.5 million, and $321.9 million, respectively.
Not all carriers are raising rates, S&P Global found. In Michigan, Pioneer State Mutual Insurance Co. has received approval for a 4.7% rate decrease, lowering the expected premiums by $5.6 million. The new rate will affect about 61,000 policyholders beginning July 1.
S&P Global notes that states use a variety of rate regulation mechanisms such as prior approval, modified prior approval, file and use, and use and file. The form filing laws govern the type of policy form regulation used by the state and may not require explicit approval by state regulators prior to using the new rate, it said.
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Featured image by cnythzl/iStock
Chart by S&P Global Market Intelligence. Used with permission.
