Farmers Leads Insurers’ Rate Hikes with 17.6% Increase (2024)

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Farmers Leads Insurers’ Rate Hikes with 17.6% Increase? ›

Farmers Insurance Group of Cos. raised its private auto insurance rates by a weighted average of 17.6% across 43 states in 2023, outpacing the rate hikes of its competitors but part of the broader trend in the industry, where double-digit increases have become the new norm.

Farmers Insurance's average auto insurance rate for full coverage is $3,169 per year, which puts it above the national annual average of $2,008. Farmers is more expensive than most companies because its insurance agents get commission, and insurance costs are rising as well.

This could include reasons like increased claims in your area (due to more extreme weather damage, more accidents, etc.) and higher car repair and replacement costs.

Inflation. Nobody in America will be surprised to learn that inflation has spread to all areas of the economy, including car insurance. As vehicles become more expensive to repair and replace, car insurance rates climb as well. The price of both new and used cars has soared over the past few years.

At the same time, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of “bbb+” (Good) on the outstanding surplus notes of Farmers Insurance Exchange (Woodland Hills, CA) and Farmers Exchange Capital (Wilmington, DE). The outlook of these Credit Ratings (ratings) is stable.

Farmers Rates for Senior Drivers

Farmers has the second-highest rates for senior drivers among companies we reviewed, just behind Allstate, which has average annual premiums of roughly $3,000 for married 60-year-old female and male drivers.

Zurich Insurance Group

Zürich Versicheru... AG

If you're wondering why your car insurance went up, you aren't alone. One of the most common reasons is simply because your insurer increased its rates. Whether to account for inflation, recoup funds after a natural disaster or cover higher claims, many insurance companies increased rates in 2022.

Does credit score affect car insurance rates? Yes. A higher or lower credit score can have a big impact on your insurance rate. Poor credit increases full coverage rates by 86% compared to good credit.

With increasing costs across various parts of the automotive industry, from higher average repair costs to continuing supply chain issues, auto insurance companies have needed to raise rates to turn a profit.

Are rising rates good for insurance companies? ›

As noted above, the financial performance of life insurers generally improves with higher interest rates. As their existing bonds mature, they will be replaced by bonds with higher interest earnings.

A full-coverage policy costs two and a half times more than one with minimum liability coverage only. That's because full coverage typically includes comprehensive and collision insurance. These coverages pay to repair or replace your car if it is damaged.

Drivers in states that require more than liability insurance or mandate higher policy limits usually pay more for coverage than people in other areas.

Farmers is so expensive because of agent commissions and rising costs overall for insurance companies. At $1,044 per year, the average Farmers car insurance policy is a lot more expensive than the national average of $671 per year for a policy with minimum coverage.

According to data from Quadrant Information Services, car insurance rates from Farmers tend to be higher than average. We found that the average full-coverage policy from Farmers costs $3,169 per year, which is about 58% more than the national average of $2,008.

All 10 of the top auto insurers in the U.S. imposed double-digit increases throughout 2023.

Both Farmers and Progressive offer standard coverage that likely will suit your situation. Progressive offers lower rates for many potential policyholders. However, Farmers' customer satisfaction with claims ranks higher among the major insurers.