If you haven’t been lobbying your insurance company for lower rates on home and auto coverage, there may be a $25 billion reason why you should.
In a Jan. 23 letter to state insurance commissioners, the consumer advocacy group asserted that insurers would garner a $25 billion “windfall” from tax savings and this should result in lower premiums for customers. (The insurance business is regulated by the individual states and companies must apply for rate changes.)
“If you raise the tax rates, the investment income drops and insurers file rate increases,” said J. Robert Hunter, director of insurance at the Consumer Federation of America and co-author of the letter to regulators.
“When their taxes go down, they need less premium, so their rates must come down,” he said.
Insurance trade associations disputed the consumer group’s findings in a Jan. 30 letter to regulators, saying that the consumer group’s claim “oversimplifies and overstates the impact of federal tax changes in a number of ways.”
“The calculations fail to consider the effect of other factors in rate filings — such as upward loss trends and the resulting increase in reinsurance costs — some of which will offset the impact of a tax reduction,” the American Insurance Association and the Property Casualty Insurers Association of America wrote in a joint letter to state insurance commissioners.
Here’s how you can push for lower premiums.