With more drivers on the road, increasingly costly repairs, and more texting while driving a car, auto insurance claims are rising and subsequently premiums are fast rising as well. According to the recent Bloomberg Business Week (2017), U.S. auto insurers have been paying $1.05 in costs for every $1 in premium revenue as compared to 95 cents per a dollar premium revenue about a decade ago. Thus, auto insurers are currently losing money. One of the culprits for high costs is the higher repair costs. A normal repair bill for a typical accident costs $1,500 about 10-15 years ago, but now costs approximately $3,500. To make up for such loss, the auto insurer is raising its price (e.g., more than 10% a year). The U.S. Department of Labor’s recent consumer price index shows that the pace of auto insurance premium increase has hit a 13 year high.
Five most expensive states in the U.S. (in terms of average annual premium) are:
- Michigan: $2,087 per vehicle
- Delaware: $2,073
- Oklahoma: $1,990
- Kentucky: $1,925
- Texas: $1,762
Five least expensive states in the U.S. are:
- Ohio: $764
- North Carolina: $817
- Idaho: $919
- Maine: $937
- Iowa: $971
For comparison shopping of the best auto insurance deal, please visit https://www.compare.com/lp5?utm_source=google&utm_medium=cpc&adpos=1t1&creative=156346861194&device=c&matchtype=e&network=g&gclid=CNHZ66OazNICFRUkgQoddhsGNw&utm_source=google&utm_medium=cpc&adpos=1t1&creative=156346861194&device=c&matchtype=e&network=g&gclid=CNHZ66OazNICFRUkgQoddhsGNw
Before deciding on the best option, you need to answer the following questions.
- How much coverage that I need? Some auto insurers such as Metromile offer cheaper options by allowing its customer to pay for coverage based on how much he/she drives.
- How can I get more value for my insurance premium?
- How can I lower my insurance premium? Some insurers such as Nationwide offer discounts for the alumni of certain universities. Also, preventive safety measures such as lane departure warning, automatic emergency braking system, adaptive cruise control, and self-parking technology may reduce premiums. Plus, bundling your policy (both auto and homeowner’s insurance policy) with the same insurer can lead to significant discounts.