Have you seen this headline, recently? It made its way around the news and social media in the last week or two. It is a headline grabber and is designed to make you look. The one above is from the Orange County Register on August 14, 2024. Think of it as the newspaper trying to sell more newspapers, or the social media companies looking for more clicks to find a way to capitalize off a headline. Either way, there is some truth, but, of course, the headline is not the whole truth.
Are insurance rates up? Yes
Are car insurance rates up 54% this year? No
The real question is why are insurance rates up?
If we look back to Covid, the Department of Insurance mandated that car insurance companies refund premiums, because people were no longer driving as much as they used to. And car insurance rates were then frozen for about 3 years.
The thing is, people started driving again after a few months during Covid. Insurance claims were back to normal very quickly, except the rates could not keep up with what happened next: Inflation!
Inflation spiked and everything became more expensive. Except, insurance rates stayed the same. In March 2023, Progressive was the first auto insurance company to request and receive a double-digit rate increase. They also received a second double-digit rate increase this year.
I had the privilege of attending one of their road shows a few weeks back, where they informed us that they are rate adequate. What that means is, they do not believe they will need to increase their auto rates for the next two years, bringing some stability back to their insureds.
Because insurance companies were not allowed to increase their rates during or right after Covid, we did not experience a slower increase in our insurance rates, like we normally have in the past. If we had a 10% increase each year for the last 3 years, it would be the equivalent of a 33.1% increase. But, because we did not have any real increases, this created the perfect storm. Some are now saying and seeing a 54% increase in auto insurance, which would have happened anyway over the last 3-4 years had the Department of Insurance allowed it.
Fast forward to today, there are still many insurance companies who have filed for rate changes and have not yet received them. The Department of Insurance has promised to have their new regulations in place by December 2024. This promise was made back in September 2023 (link here).
Once the new regulations are in place, the insurance companies will file their rate changes, which will hopefully, only take 60 days for review and approval. As soon as the rates are approved, they will be put into place for us consumers to start paying. After a year or so of the new premiums being paid by us, I believe the insurance market will begin to stabilize. I am excited for 2027, with the idea of more insurance companies returning to the marketplace and having more options for our clients.
Elizabeth's Corner
My wife, Elizabeth, is a Mom, an amazing wife and an incredible chef. She trained at the California Culinary Academy in San Francisco. She shares a helpful tip below.
There is always a good time for a cookie. A really good cookie. A Brown Butter Chocolate Chip Cookie. It is the perfect combination of sweet and salt. This months cookie recipe is courtesy of Erin Clarkson.
Brown Butter Chocolate Chip Cookie
Ingredients:
1 stick + 3 tbs unsalted butter, cold from the fridge is fine
1/2 cup light or dark brown sugar
1/8 cup granulated sugar
1 large egg
1/2 tsp vanilla bean paste or vanilla extract
1/3 cup all-purpose flour
¼ tsp baking powder
¼ tsp baking soda
1 tsp salt
8oz dark chocolate, chopped, plus about 5.5oz additional for the tops of the cookies (optional)
Directions:
Preheat the oven to 350°f. Line two sheet pans with parchment paper.
Place the butter in a medium saucepan, and place over medium heat. Cook until the butter has melted, and then continue to cook, swirling the pan often and stirring with a whisk, until the butter foams and turns golden brown and nutty - this should take 3-4 minutes. Let cool for 10-15 min.
Add the brown sugar and granulated sugar to the bowl with the brown butter, and mix to combine.
Add the egg and whisk well for 1-2 minutes, or mix using an electric mixer, until the mixture has lightened in color and has thickened.
Add the vanilla and mix well.
Add the flour, baking powder, baking soda, and salt. Mix to combine with a rubber spatula until there are some flour streaks remaining - this is to ensure you do not over work the dough.
Add the chocolate and mix to incorporate with a rubber spatula.
Scoop 6 cookies (about 2oz per cookie dough ball) using a 2 Tbsp cookie scoop onto the prepared baking sheet. If desired, flatten each ball of dough, press more chocolate pieces on the top, and roll into a ball (this works particularly well in this recipe). Arrange evenly apart on the pan. Keep the remainder of the batter in the bowl lightly covered with plastic wrap.
Bake the cookies for 11-13 minutes, until the edges are set. Bake for longer if you would like your cookies to be crispier. Remove from the oven and bang the pan briefly on the counter to help deflate the cookies. If you would like to help your cookies to be perfectly round, use a cookie cutter slightly larger than the cookie to ‘scoot’ them into a perfectly round shape.
Sprinkle the tops of the cookies with flaky sea salt. Allow to cool on the pan for 10 minutes then transfer to a wire rack to cool completely.
Enjoy!
Until next time, if you have questions, concerns, or need some advice, please call our office 949-484-7500.
