Hartford Insurance is Raising Auto Insurance Rates by Nearly 20% in Tennessee

On June 20th The Hartford Insurance Company of the Midwest and Twin City Fire Insurance Company, both members of the larger The Hartford family of insurers, filed to raise auto insurance rates in Tennessee by 19.8% on average.

They were approved on June 23rd without any amendment from the Tennessee Department of Commerce and Insurance. In total 14,083 policyholders in Tennessee will be affected by the change. The changes will go into effect on September 7th of this year for all new business and October 28th for all policyholders renewing their policies.

What Hartford Customers Should Expect

The 19.8% increase is an average and increases can be as high as 63% where required, but also as low as 0% where required. The company states in its filing however that it will impose caps on how much existing customers' rates can go up. There is an important caveat though. Rate capping will only apply to a few rating factors, but not base rates.

The base rate is the cost of your policy before any discounts or other rating factors are applied. It is usually a function of your driving record, where you live and the personal information you submit for your quote. Some drivers may experience a higher percentage increase in their base rate, and that will not be capped. Your policy will be limited to how much it may go up based on changes to a few factors such as the type of car you drive, and what you use your car for, among others.

Cost of the Rate Change

The rate increase is expected to add roughly $3,233,000 to existing written premiums of the 14,083 policyholders between the two Hartford owned companies. On average it would mean each policy will be approximately $229.57 more expensive. The current average cost for a policy of the affected drivers is $1,254 for The Hartford Insurance Company of the Midwest and $1,193 for Twin City Fire Insurance Company.

Graph shows the average policy increase for The Hartford filed auto insurance rate increase in Tennessee

13 other insurers submitted filings to change rates for car insurance in Tennessee in the month of June. The average increase between all filings was 6.9%. MetLife had the second highest increase with 9.9% behind The Hartford. The rate increases follow a nationwide trend of auto insurers raising rates in order to make up for increasing losses due to frequent and severe claims. Overall, Tennessee auto insurance has gone up about 21% since 2011, just about the same as the nationwide average.

Mark Fitzpatrick

Mark is a Senior Research Analyst for ValuePenguin focusing primarily on the insurance industry, primarily auto insurance. He previously worked in financial risk management at State Street Corporation.

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