Here’s why your auto insurance will likely cost more next year

In 2015, many drivers have been enjoying some of the lowest gas prices in years thanks to a drop in global oil markets. As a result, more people have taken to the road as lower fuel prices have made driving relatively more affordable than before. The Boston Globe reported that in June and July of 2015, close to 16 million cars passed through Maine tolls – the highest number of cars the Maine Turnpike Authority has ever seen. With this increase in drivers on the road, unfortunately, came an increase in accidents. Many of the nation’s top insurers have been reporting severe drops in their underwriting income – a fact that is one of the prime drivers in auto insurance price increases that are coming over the next several months.

This year has been rough on the nation’s largest auto insurance companies . In their latest earnings reports, Allstate ALL +1.61%and Berkshire Hathaway BRK.B +% owned GEICO reported extremely poor performance. Over the first nine months of 2015, Allstate reported a net underwriting loss of $13 million on their auto insurance line of business – compared to net underwriting income of $539 million in the same period last year. GEICO, on the other hand, reported a pre-tax underwriting income of $471 million – compared to $1.01 billion last year.

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