R.J. Lehmann on Cost Drivers of Auto Insurance Rates
ICLE Editor-in-Chief R.J. Lehmann was quoted by Repairer Driver News in a story about former President Donald Trump’s proposal to slash auto-insurance rates nationwide. You can read the full piece here.
Insurance News Net interviewed Ray Lehmann, International Center for Law and Economics editor-in-chief and senior fellow, to dig into what role the federal government could play in reducing auto insurance costs.
“To know what the former president is intending to propose, you would need more details than he’s given so far,” said Lehmann. “But insurance is a state-regulated system. The federal government has very little to do with insurance rates and the best they could do is contribute to making the roads safer through things like the NHTSA [National Highway Traffic Safety Administration].”
However, Lehmann’s comments don’t address HB9618. If the bill was to pass or a version of it, it could possibly change the role the federal government could play in regulating auto insurance.
Lehmann told Insurance News Net that the federal government could invest in NHTSA to do more aggressive distracted driving campaigns. He said the federal government also has tools to lower inflation, which could reduce insurance claims costs.
Lehmann said there are things that Congress and the president could do to lower rates but promising a specific number is difficult.
“There are things you can do to make the road safer,” Lehmann said. “There are things you could do to address social inflation or what juries are coming back with as verdicts, but how that shakes out in actual rates is kind of a longer-term issue and not something that can be done immediately. Not without bankrupting the industry anyway, which doesn’t serve anybody.”