Rising cost of auto insurance a tough problem to solve

Georgia drivers saw rising auto insurance bills in recent years, yet the industry was not seeing gains, an advocate told state lawmakers.

Companies offering commercial, health and life insurance were posting ever higher pre-tax operating gains, but not those in the auto and home insurance segments, said Robert Passmore of the American Property Casualty Insurance Association.

Data he presented Nov. 21 to a special committee of the House of Representatives showed industry gains in that "personal" insurance segment falling below zero in mid-2021 before bending back up later that year but still in the red in 2023.

Passmore blamed more aggressive, speedy and distracted driving — and more expensive repairs.

As vehicles have become more computerized, even once-simple repairs, like replacing a windshield, have become more costly, due to onboard cameras and sensors.

"The average car on the road is about 12 years old in the United States right now," he said. "And a large part of those right now don't have that kind of technology. So, those kinds of expenses are only going to increase."

But people in the auto repair industry complained that insurance companies have not been covering the full cost of those repairs.

Jason Babb, owner of Babb's Body Shop in Chatsworth, asked lawmakers to support legislation that prohibits insurers from denying claims when a shop follows the manufacturer's repair procedures.

"It would protect consumers by ensuring that required safety inspections, scans, and calibrations are treated as standard reimbursable parts of a repair, not optional add-ons to be argued over claim by claim," Babb said. "And it would keep all Georgia shops on a level playing field so the shops that are doing the right thing aren't punished when compared to those who are cutting corners."

Passmore countered that such laws in other states have driven up insurance rates, and he contended that auto manufacturers' repair standards can be self-serving, requiring shops to use their official parts.

Two reasons for rising consumer costs may be difficult to counter because they are rooted in behavior.

A team of 35 agents at the state office of Insurance and Safety Fire has been investigating about 10,000 reports of insurance fraud a year, said Bryce Rawson, who handles legislative affairs for the agency.

"We rank third in the nation in terms of questionable claims," he said.

Joshua Carroll, a Macon lawyer and president of the Georgia Trial Lawyers Association, said the number of wrecks has risen over the past 15 years, tracking the market saturation of smartphones.

And for some reason, Georgia has become a magnet for crashes. "We have double the amount of wrecks in Georgia of the national average," he said. "That's really a breathtaking statistic."