Millions of Americans saw their car insurance premiums decline significantly in the last 12 months, according to the results of a survey conducted by independent research firm. Analysts say that the average car insurance rate dropped by some six percent during a twelve-month span from June 2008 to June 2009. Even so, experts say that the current level is actually 12 percent higher than the premiums before the start of the economic crunch.
The tough economic environment is forcing many motorists to reconsider their insurance premiums, with some deciding to drop their policies altogether. Even insurance providers are feeling the pinch, with many insurers slashing rates just to stay afloat in the fierce industry competition.
Despite the reported actual increase in insurance rates between the beginning of the recession and this year, some states have posted lower than even premiums. In fact, motorists from the states of Massachusetts, Mississippi, Alabama, and Ohio have witnessed insurance rates decline significantly last year compared to premiums the previous year. Massachusetts alone posted an eight percent drop in average insurance premiums.
Some states like Nebraska and Delaware, on the other hand, saw insurance rates climb slightly. Analysts say that the hikes have been fairly small and insignificant and are expected to be offset by the lower average premiums in recent months.
Experts point out that because of the current economic climate, insurance firms and car owners alike are looking for ways to cut back on expenses. With so many American motorists raising deductibles to slash premiums, providers are fast losing revenues. The presence of more competitors and fewer willing car owners means lower demand for insurance. This has resulted in many insurance companies lowering rates to drum up demand.
With insurers slashing prices in response to lower demand from motorists, other providers have followed suit. This has lead to tougher competition and an ongoing price wars. The situation has been complicated with the sudden influx of college-bound drivers looking for affordable auto insurance.
A separate study found out that 90 percent of all policyholders have expressed their intention to look for lower premiums. The figure is a huge increase over recently published data regarding car owners switching providers. The alarming figures are also compounded by the fact that the number of new motorists looking for cheaper insurance rates have jumped by some 20 percent compared to last year. Experts say that this conclusive proof that car owners are looking for ways to save money on their insurance policies.