Study: Liability Drives Connecticut’s Auto Rates Higher

Jan. 17--Auto insurers increased rates for Connecticut drivers by 4.1 percent on average in 2017, the state Insurance Department determined, with homeowners insurance rates up 2.4 percent.

The Connecticut Insurance Department reviews rates annually, with property and casualty insurance premiums not subject to the department's prior approval as the case with health insurance premiums.

The study measures changes in rates and not the average dollar premiums paid by individual drivers. Auto insurance in Connecticut cost about $1,030 as of 2014, the most recent year studied by the National Association of Insurance Commissioners, making the state the 10th most expensive in which to insure a vehicle.

The average U.S. auto rate rose 3.3 percent that year, with New Jersey highest at $1,250 and New York third at about $1,200. Rates are influenced in part by coverage requirements for property and injury liability that vary from state to state.

Nationally, auto insurers entered 2017 coming off their worst underwriting performance in 15 years as tracked by Fitch Ratings, which cited years of overly aggressive pricing in the quest to win new customers. After hundreds of thousands of vehicles in Texas and Florida were damaged in last year's hurricanes, fears have subsided of any resulting sharp increase in auto insurance rates, with reinsurance clauses kicking in for many carriers that helped them recoup a percentage of their claims payments.

Connecticut insurers increased last year just 1.2 percent the component of rates covering physical damage to vehicles, with the overall increase driven by the liability component of rates, up 5.9 percent and a half percentage point below the previous year's increase.

Geico was the largest auto insurer in Connecticut last year, with the Berkshire Hathaway subsidiary collecting $260 million in premiums for a 9 percent share of the market. Others with in excess of $100 million in premiums include American Commerce, Amica, The Hartford, Liberty Mutual, MetLife, Nationwide, Progressive, Safeco, State Farm, Travelers and USAA.

Of that group of carriers, the Connecticut Insurance Department determined Mapfre subsidiary American Commerce posted the biggest increase at 12 percent for auto policies that brought in $73 million in premiums, less than half its book of business in Connecticut. Geico and MetLife policyholders had rate increases of about 3 percent on average.

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