Car Insurance Rates Are on the Rise
As Americans drive more miles, car insurance claims are rising and so is the average insurance payout. Insurance companies are reacting by hiking premiums. This is one of the downsides of really cheap gas price. Find out more why car insurance rates are on the rise and use free online car insurance quotes from our website to compare prices.
According to the U.S. Bureau of Labor Statistics, car insurance rates rose more than 5 percent in the 12 months through March, a stretch when the overall inflation rate was less than 1 percent. In another study, Your Driving Costs, released in April, AAA reports that the premium for a married middle age man with a good driving record rose nearly 10 percent over the past year, to more than $1,200.
Car insurers say they have little choice but to raise rates. Berkshire Hathaway, the parent of GEICO, the second largest personal auto insurer, noted in its recent annual report that “we continue to implement premium rate increases where necessary” to combat recent cost headwinds. Allstate announced in April that it plans to raise premiums an average of 25 percent in the state of Georgia. The announcement led the insurance commissioner there to issue a consumer alert.
Consider how much insurers are paying out in claims. While the long-term trend shows that the number of accidents is decreasing, the average payout on the accidents that do occur is increasing. From 2005 to 2013 (the latest data available), the number of claims for bodily injury fell 14.5 percent, according to the Insurance Research Council, yet the average cost per payout rose 32 percent, to more than $15,500. During that period the general inflation rate rose 19 percent. Those high payouts are likely to continue. Auto fatalities rose an estimated 8 percent last year, according to the National Safety Council. That was the largest annual increase in 50 years and suggests that insurance companies will continue to fight to balance their costs.
Check our webpage for more info related to car insurance. Read more!