Car Insurance: Unintended consequences?

Investment Analysis Clubs Liquid Lounge
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While this has helped insurance industry, there are various theories behind the car rise. One interesting thesis is:

Any issues with EV’s require complete replacement similar to totaling the car

I hope the industry adjusts the insurance prices quickly to reflect this.

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Ok, but i think we know inflation has been driven mostly by labor shortages and the need to pay higher wages to get people to come to work.

Higher repair costs means vehicle more likely to be totaled.

It would be interesting to learn what part of this is due to EVs. Are EVs in their own risk group? Or in the same group with ICEs?

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The wage inflation (if any) doesn’t justify 55% raise in insurance rates. Even if you account for:

  • repair wage costs
  • component costs (due to shortage, which is already remedied)
  • higher accident rate (back to normal)
  • used car sales price (still stubbornly high, but coming down)

The insurance rates has to come down.

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Re: wage inflation if any

Meanwhile Boeing is on strike, Deere just had a major settlement, longshoremen are about to strike. Deere contract has healthy cost of living adjustment and returns to defined benefit pensions.

Union contracts delay response to inflation but no question it happens.

Meanwhile we have proposals for major increases in tariffs.

I think wage inflation is real and definitely a factor in insurance costs. Even fires and hurricanes probably have an affect at least in some regions.

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