Vanderbilt: $150B Overpaid on 2024 Insurance

A new analysis from the Vanderbilt Policy Accelerator indicates that Americans overpaid approximately $150 billion in 2024 for home, auto and business insurance premiums, while proposing federal regulations to require insurers to pay out a higher share of collected funds on claims.

The report, which examines industry loss ratios, found that for every $1 in premiums collected last year, insurers reimbursed policyholders just 62 cents on average for claims related to accidents, natural disasters and other losses. This marks a decline from the 80 cents per dollar typical in the 1980s and 1990s. By mandating a return to an 80% loss ratio on more than $1 trillion in annual premiums, the analysis estimates households and businesses could save $150 billion yearly.

Brian Shearer, director of competition and regulatory policy at the Vanderbilt University think tank and a former senior adviser at the Consumer Financial Protection Bureau, attributed the lower ratios to excessive insurer spending. "The fact that the loss ratios are so low means that the insurance industry is charging too much," Shearer said. He argued that premiums fund corporate perks, stock buybacks, executive...