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'It's like another mortgage'

Car insurance rates have risen 19% nationwide over the last year. NewsdayTV's Virginia Huie reports. Credit: Anthony Florio; File Footage

Claudia Schimmel and her husband felt sticker shock when they received their car insurance renewal notice last fall.

The six-month premium to insure the Lindenhurst couple’s 2023 Volkswagen SUV and 2019 Ram pickup truck with Geico increased in November by about $500, or 30%, to $2,223, she said.

“We’ve had to shift a few things around, definitely," said Schimmel, 31, the mother of a 2-year-old boy. "The excess spending on toys and things like that definitely goes down.”

She and her husband plan to shop around for cheaper insurance, she said. 

They're not alone.

Surging auto insurance premiums, driven by the rising cost of claims and other factors, have led to a record number of consumers shopping for cheaper policies, experts said. Analytics company LexisNexis Risk Solutions ranked New York third among the states with the largest annual increases in shopping growth in the third quarter of 2024, reporting a 58% jump.  

The most expensive auto insurance in 2024 in Nassau County — and on Long Island — was in an Inwood ZIP code, 11096, where the average annual premium was $4,464 last year, 52% higher than a year earlier, according to The Zebra, an insurance comparison company. The second-highest premium was in a Valley Stream ZIP code, 11581, where the 2024 average was $4,436, a 53% hike from the 2023 price. 

Nassau County's average insurance rates are higher than Suffolk County's, partly due to Nassau's higher wages and its proximity to heavily congested New York City, which has the state's highest premiums.

(The most expensive car insurance in the state last year was in a Brooklyn ZIP code, 11212, which had an annual average premium of $7,799, according to The Zebra.)

But Suffolk car owners are still feeling the pinch.

The highest auto insurance rate in Suffolk County was in a Brentwood ZIP code, 11717, where the average annual premium in 2024 reached $3,653 — a 43% increase compared with 2023, according to The Zebra. A Central Islip ZIP code, 11722, ranked second with a $3,640 average premium in 2024 — also a 43% increase from the previous year.

Meanwhile, last year, the statewide average rose 50% to $2,526 and the national average increased 19% to $2,189, according to The Zebra’s “2025 Auto Insurance Trends Report.” 

The rising costs are leading some car owners to make difficult decisions, experts said. An increasing number of motorists are going uninsured, said David Seider, chief commercial officer at The Zebra, which is based in Austin, Texas.

"The trend is totally understandable, as Americans have grappled with how to manage basic household spending amidst rapidly inflating costs on everything from groceries to rent," Seider said in an email.

Driving without car insurance is illegal in New York and almost every other state, and can come with stiff penalties, including driver's license suspensions, steep fines and even jail time.  

Car insurance prices are rising for several reasons, including an increase in the number of car accidents and their severity, according to the Insurance Information Institute, a Malvern, Pennsylvania-based nonprofit that represents the insurance industry. 

The number of drivers on the road has returned to the levels that existed before the COVID-19 pandemic, but the driving behavior that led to the high losses has not improved, institute spokeswoman Loretta L. Worters said in an email. 

"More accidents — a lot caused by distracted driving, texting while driving, etc. — with severe injuries and fatalities have driven up claims and losses in terms of both vehicle damage and liability, while attracting greater attorney involvement and legal system abuse,” she said.

Also, cars are being built with more advanced technology, which saves lives but also makes repairs more costly, she said.

Wildfires, flooding and other weather disasters also are a factor in insurers raising rates to account for financial losses, according to The Zebra report, which cited the 24 separate billion-dollar weather events last year in the United States, including Hurricanes Helene and Milton on the East Coast.

While the rising costs of parts and labor to repair cars contribute to higher insurance premiums, a bigger factor is the greed of insurance companies whose rate hikes have exceeded the nation’s overall rate of inflation, argued Michael DeLong, a research and advocacy associate at the Consumer Federation of America, a Washington, D.C.-based advocacy group.

“And most of the [states’] insurance regulators are letting them get away with it,” he said.

Insurers seeking to raise premiums in the state must get approval from the New York Department of Financial Services, but there are exceptions. The state has a “flex rating” law that allows insurers to raise premiums by an average of less than 5% in a 12-month period without seeking department approval.

“All auto rates, whether prior approval or flex rating, must be actuarially justified and cannot be excessive, inadequate, destructive of competition, or detrimental to the solvency of insurers,” according to the agency, which said that it reviews applications individually. 

Insurance companies consider several factors when calculating auto premiums, including consumers’ driving records, education, occupations, credit scores, ages and genders. They also consider ZIP codes, which take into account the prevalence of auto insurance fraud, costs of medical care and weather in the area.

New York, California, Georgia, Hawaii and Massachusetts have banned insurance companies from considering consumers’ education and occupations when setting auto policy rates, DeLong said.  

While the price of auto insurance is surging in New York, the number of insured vehicles is declining. Registration suspensions for uninsured vehicles increased by 25,959, or 7%, to 406,051 statewide between 2022 and 2024, according to the New York State Department of Motor Vehicles.

The number of tickets that police wrote to drivers operating uninsured vehicles in the state grew by 5,711, or 9%, to 70,733 between 2022 and 2023, according to the DMV. The 2024 ticket data is not available yet, but the number is expected to be a few thousand higher than the amount in 2023, the agency said. 

The DMV cannot definitively attribute the increase in registration suspensions and tickets for uninsured vehicles to the rising costs of auto insurance, according to the agency. 

The rate of uninsured driving is increasing in some states by as much as 30%, according to an email from Shannon Martin, insurance analyst at Bankrate, a Manhattan-based consumer financial services company. But driving without insurance is a risk that should be avoided, she said. 

“Allowing car insurance to lapse due to non-payment can trigger a range of issues, including state fines and higher insurance rates when the policy is reissued,” Martin said.

Not only does driving uninsured put car owners at grave risk of having to pay for damages or injuries they cause, but the practice also helps drive up insurance costs for motorists who do have coverage, DeLong said.

Instead of dropping insurance, drivers should discuss with their insurers removing unnecessary coverage, or consider switching to a usage-based insurance policy, Martin said.

Stony Brook resident Lee Chaconas, 67, was able to apply discounts to her Geico policy for her 2019 Honda Accord, she said. A retired Geico personal-injury claims adjuster, Chaconas pays $789 for a six-month premium, with a 10% discount because she is a member of the insurer’s credit union and an additional 10% discount for taking a defensive driving course every three years, she said.

But with her premium increasing $20 to $30 annually, “which adds up,” she doesn’t plan to ever buy another car if she can help it.

“They’re going to bury me in that car,” she said.

Insurance companies experienced big profit losses in 2022, as steep inflation drove up the costs of repairs, labor and used cars. They have raised rates in the past few years to try to offset those losses.

“Insurance companies now are running to the bank with record profits," said Aaron J. Stein, president of Norton & Siegel Inc., an insurance agency in Babylon. "They’re trying to make up for the years they lost, but at some point … this is a problem.” 

Geico’s underwriting profit in the third quarter of 2024 was $2 billion, up from $1.1 billion in the same period a year earlier.

In the third quarter of 2024, Progressive’s revenue grew 25% to $19.5 billion compared with the same period a year earlier. The company had 33.9 million active insurance policies, a 14% increase from the same period in 2023. 

In New York state, Geico, State Farm, Allstate and Progressive accounted for 70.87% of the market share for auto insurers in 2023, according to a report from the National Association of Insurance Commissioners.

Among the insurers with more than $100 million in written premiums in the state, State Farm had the biggest auto insurance rate increase for renewing customers last year, an average of 24.9%, according to S&P Global Market Intelligence, a Manhattan-based financial analysis provider. State Farm, New York's second-largest auto insurer, said it has experienced unprecedented growth in its car insurance business in the state.

“While it is a privilege to be chosen by so many New York drivers, it is important that our rates are adequate to support the business and that we’re able to match price to risk,” Justin Tomczak, a spokesman for the Bloomington, Illinois-based company, said in an email. 

During the pandemic in 2020, State Farm enacted a double-digit rate cut in its auto policies in New York state, he said.

Allstate Fire and Casualty Insurance Co. had the second-largest car insurance rate increase in New York last year, averaging 18.7%, according to S&P. The insurer did not respond to requests for comment. Progressive, which averaged increases of 19.7% in 2023 and 4.6% in 2024, also did not respond.

Geico is New York State's largest auto insurer, holding 28.37% of the market share in 2023, according to NAIC. Geico had an average New York car insurance rate hike of 7% in March 2024 and a 10% increase in August 2023, according to S&P.

Newsday asked Geico about the premiums it charges in the state and why it has increased them. The Chevy Chase, Maryland-based company forwarded the inquiry to the American Property Casualty Insurance Association, which responded by email:

“Across the country, auto insurance premiums have been on the rise for the simple reason that the cost of things that auto insurance pays for has been rising," Kristina Baldwin, vice president in state government relations at the Washington, D.C.-based association, said in an email. "The cost of medical care for accident victims continues to increase as well as the cost of the parts and labor to repair vehicles.” 

She also cited riskier behavior, including distracted and impaired driving, as factors that are increasing injury and collision claim costs and compounding the effects of inflation. 

Between 2019 and 2023, the number of car crashes in the state fell 18% to 418,687, but fatal crashes rose 16% to 1,022, according to the Institute for Traffic Safety Management & Research in Albany. On Long Island, the number of crashes dropped 5% to 77,547, while fatal crashes grew by nearly a fifth, reaching 204 annually.

Insurance rate increases are expected to continue in 2025 across Long Island, New York and the nation, but will likely proceed more modestly than in the past two years as inflationary pressure eases on the cost of repairing and replacing damaged vehicles, said Tim Zawacki, insurance sector strategist at S&P.

The second half of the year should bode better for consumers, he said.

“Assuming no unexpected economic events, we would expect price competition to pick up across markets," he said. "And we’re already seeing carriers spend significantly more money on advertising seeking to attract new customers."

Claudia Schimmel and her husband felt sticker shock when they received their car insurance renewal notice last fall.

The six-month premium to insure the Lindenhurst couple’s 2023 Volkswagen SUV and 2019 Ram pickup truck with Geico increased in November by about $500, or 30%, to $2,223, she said.

“We’ve had to shift a few things around, definitely," said Schimmel, 31, the mother of a 2-year-old boy. "The excess spending on toys and things like that definitely goes down.”

She and her husband plan to shop around for cheaper insurance, she said. 

They're not alone.

Surging auto insurance premiums, driven by the rising cost of claims and other factors, have led to a record number of consumers shopping for cheaper policies, experts said. Analytics company LexisNexis Risk Solutions ranked New York third among the states with the largest annual increases in shopping growth in the third quarter of 2024, reporting a 58% jump.  

The most expensive auto insurance in 2024 in Nassau County — and on Long Island — was in an Inwood ZIP code, 11096, where the average annual premium was $4,464 last year, 52% higher than a year earlier, according to The Zebra, an insurance comparison company. The second-highest premium was in a Valley Stream ZIP code, 11581, where the 2024 average was $4,436, a 53% hike from the 2023 price. 

Nassau County's average insurance rates are higher than Suffolk County's, partly due to Nassau's higher wages and its proximity to heavily congested New York City, which has the state's highest premiums.

(The most expensive car insurance in the state last year was in a Brooklyn ZIP code, 11212, which had an annual average premium of $7,799, according to The Zebra.)

But Suffolk car owners are still feeling the pinch.

The highest auto insurance rate in Suffolk County was in a Brentwood ZIP code, 11717, where the average annual premium in 2024 reached $3,653 — a 43% increase compared with 2023, according to The Zebra. A Central Islip ZIP code, 11722, ranked second with a $3,640 average premium in 2024 — also a 43% increase from the previous year.

Meanwhile, last year, the statewide average rose 50% to $2,526 and the national average increased 19% to $2,189, according to The Zebra’s “2025 Auto Insurance Trends Report.” 

The rising costs are leading some car owners to make difficult decisions, experts said. An increasing number of motorists are going uninsured, said David Seider, chief commercial officer at The Zebra, which is based in Austin, Texas.

"The trend is totally understandable, as Americans have grappled with how to manage basic household spending amidst rapidly inflating costs on everything from groceries to rent," Seider said in an email.

Driving without car insurance is illegal in New York and almost every other state, and can come with stiff penalties, including driver's license suspensions, steep fines and even jail time.  

Car insurance prices are rising for several reasons, including an increase in the number of car accidents and their severity, according to the Insurance Information Institute, a Malvern, Pennsylvania-based nonprofit that represents the insurance industry. 

The number of drivers on the road has returned to the levels that existed before the COVID-19 pandemic, but the driving behavior that led to the high losses has not improved, institute spokeswoman Loretta L. Worters said in an email. 

"More accidents — a lot caused by distracted driving, texting while driving, etc. — with severe injuries and fatalities have driven up claims and losses in terms of both vehicle damage and liability, while attracting greater attorney involvement and legal system abuse,” she said.

Also, cars are being built with more advanced technology, which saves lives but also makes repairs more costly, she said.

Wildfires, flooding and other weather disasters also are a factor in insurers raising rates to account for financial losses, according to The Zebra report, which cited the 24 separate billion-dollar weather events last year in the United States, including Hurricanes Helene and Milton on the East Coast.

While the rising costs of parts and labor to repair cars contribute to higher insurance premiums, a bigger factor is the greed of insurance companies whose rate hikes have exceeded the nation’s overall rate of inflation, argued Michael DeLong, a research and advocacy associate at the Consumer Federation of America, a Washington, D.C.-based advocacy group.

“And most of the [states’] insurance regulators are letting them get away with it,” he said.

Insurers seeking to raise premiums in the state must get approval from the New York Department of Financial Services, but there are exceptions. The state has a “flex rating” law that allows insurers to raise premiums by an average of less than 5% in a 12-month period without seeking department approval.

“All auto rates, whether prior approval or flex rating, must be actuarially justified and cannot be excessive, inadequate, destructive of competition, or detrimental to the solvency of insurers,” according to the agency, which said that it reviews applications individually. 

Insurance companies consider several factors when calculating auto premiums, including consumers’ driving records, education, occupations, credit scores, ages and genders. They also consider ZIP codes, which take into account the prevalence of auto insurance fraud, costs of medical care and weather in the area.

New York, California, Georgia, Hawaii and Massachusetts have banned insurance companies from considering consumers’ education and occupations when setting auto policy rates, DeLong said.  

Fewer insured cars

While the price of auto insurance is surging in New York, the number of insured vehicles is declining. Registration suspensions for uninsured vehicles increased by 25,959, or 7%, to 406,051 statewide between 2022 and 2024, according to the New York State Department of Motor Vehicles.

The number of tickets that police wrote to drivers operating uninsured vehicles in the state grew by 5,711, or 9%, to 70,733 between 2022 and 2023, according to the DMV. The 2024 ticket data is not available yet, but the number is expected to be a few thousand higher than the amount in 2023, the agency said. 

The DMV cannot definitively attribute the increase in registration suspensions and tickets for uninsured vehicles to the rising costs of auto insurance, according to the agency. 

The rate of uninsured driving is increasing in some states by as much as 30%, according to an email from Shannon Martin, insurance analyst at Bankrate, a Manhattan-based consumer financial services company. But driving without insurance is a risk that should be avoided, she said. 

“Allowing car insurance to lapse due to non-payment can trigger a range of issues, including state fines and higher insurance rates when the policy is reissued,” Martin said.

Not only does driving uninsured put car owners at grave risk of having to pay for damages or injuries they cause, but the practice also helps drive up insurance costs for motorists who do have coverage, DeLong said.

Instead of dropping insurance, drivers should discuss with their insurers removing unnecessary coverage, or consider switching to a usage-based insurance policy, Martin said.

Stony Brook resident Lee Chaconas, 67, was able to apply discounts to her Geico policy for her 2019 Honda Accord, she said. A retired Geico personal-injury claims adjuster, Chaconas pays $789 for a six-month premium, with a 10% discount because she is a member of the insurer’s credit union and an additional 10% discount for taking a defensive driving course every three years, she said.

But with her premium increasing $20 to $30 annually, “which adds up,” she doesn’t plan to ever buy another car if she can help it.

“They’re going to bury me in that car,” she said.

'Running to the bank'

Insurance companies experienced big profit losses in 2022, as steep inflation drove up the costs of repairs, labor and used cars. They have raised rates in the past few years to try to offset those losses.

“Insurance companies now are running to the bank with record profits," said Aaron J. Stein, president of Norton & Siegel Inc., an insurance agency in Babylon. "They’re trying to make up for the years they lost, but at some point … this is a problem.” 

Geico’s underwriting profit in the third quarter of 2024 was $2 billion, up from $1.1 billion in the same period a year earlier.

In the third quarter of 2024, Progressive’s revenue grew 25% to $19.5 billion compared with the same period a year earlier. The company had 33.9 million active insurance policies, a 14% increase from the same period in 2023. 

In New York state, Geico, State Farm, Allstate and Progressive accounted for 70.87% of the market share for auto insurers in 2023, according to a report from the National Association of Insurance Commissioners.

Among the insurers with more than $100 million in written premiums in the state, State Farm had the biggest auto insurance rate increase for renewing customers last year, an average of 24.9%, according to S&P Global Market Intelligence, a Manhattan-based financial analysis provider. State Farm, New York's second-largest auto insurer, said it has experienced unprecedented growth in its car insurance business in the state.

“While it is a privilege to be chosen by so many New York drivers, it is important that our rates are adequate to support the business and that we’re able to match price to risk,” Justin Tomczak, a spokesman for the Bloomington, Illinois-based company, said in an email. 

During the pandemic in 2020, State Farm enacted a double-digit rate cut in its auto policies in New York state, he said.

Allstate Fire and Casualty Insurance Co. had the second-largest car insurance rate increase in New York last year, averaging 18.7%, according to S&P. The insurer did not respond to requests for comment. Progressive, which averaged increases of 19.7% in 2023 and 4.6% in 2024, also did not respond.

Geico is New York State's largest auto insurer, holding 28.37% of the market share in 2023, according to NAIC. Geico had an average New York car insurance rate hike of 7% in March 2024 and a 10% increase in August 2023, according to S&P.

Newsday asked Geico about the premiums it charges in the state and why it has increased them. The Chevy Chase, Maryland-based company forwarded the inquiry to the American Property Casualty Insurance Association, which responded by email:

“Across the country, auto insurance premiums have been on the rise for the simple reason that the cost of things that auto insurance pays for has been rising," Kristina Baldwin, vice president in state government relations at the Washington, D.C.-based association, said in an email. "The cost of medical care for accident victims continues to increase as well as the cost of the parts and labor to repair vehicles.” 

She also cited riskier behavior, including distracted and impaired driving, as factors that are increasing injury and collision claim costs and compounding the effects of inflation. 

Between 2019 and 2023, the number of car crashes in the state fell 18% to 418,687, but fatal crashes rose 16% to 1,022, according to the Institute for Traffic Safety Management & Research in Albany. On Long Island, the number of crashes dropped 5% to 77,547, while fatal crashes grew by nearly a fifth, reaching 204 annually.

Insurance rate increases are expected to continue in 2025 across Long Island, New York and the nation, but will likely proceed more modestly than in the past two years as inflationary pressure eases on the cost of repairing and replacing damaged vehicles, said Tim Zawacki, insurance sector strategist at S&P.

The second half of the year should bode better for consumers, he said.

“Assuming no unexpected economic events, we would expect price competition to pick up across markets," he said. "And we’re already seeing carriers spend significantly more money on advertising seeking to attract new customers."

Ways to save

The Consumer Federation of America has some tips to help lower auto insurance costs:

  • Shop around. Don’t rely on online tools only. Call insurance agents to get quotes.
  • Consider whether you really need comprehensive and collision coverage if driving an older car. “If your car’s value is less than 10 times what you pay annually for these policies, it might be time to drop them,” the federation said.
  • Check your credit report for errors. If you find any, contact the credit bureaus to correct the mistake and then ask the insurer to reevaluate your premium. If your credit score is low, take advantage of resources on the America Saves website to improve your score.
  • Update your insurer if you’re driving less due to remote work or retirement, because a decrease in mileage could lower your premium.
  • Take a defensive driving course. This class can lower your premium, even if you already have a good driving record.
  • Pay the policy in full. Some insurers offer discounts of 5% to 12% off the premium if policies are paid in full instead of in installments.
  • Ask about discounts. Insurers may offer savings for military service, college alumni memberships, auto anti-theft devices, automatic payment setups and more.
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