Healthy Competition and Location Help Keep Auto Insurance Costs Low


Amidst rising auto insurance rates all-over the country, Kansas State motorists may sleep well at night, consciously knowing that any hike in their car policy this year is very much unlikely.

Healthy Competition and Location Help Keep Auto Insurance Costs LowA report made by the National Association of Insurance Commissioners (NAIC) revealed that Kansas placed 6th nationwide in terms of having the lowest average insurance expenditures. This, in turn, is equivalent to one of the lowest rates for vehicle coverage throughout the nation.

NAIC is a non-profit organization whose aim is to organize supervisory and regulatory efforts of the various state insurance commissioners from all-over the country.

In the same data it released, policy holders of this state had spent around $568 per vehicle in 2007 for automobile coverage. As such, there is a glaring difference of $227 as opposed to the $795 national average. An increase had been recorded last year, but this amounted to only $11.

NAIC also listed down the states which have the lowest average expenditure or household expense for motor insurance.

Topping this list is North Dakota with $512; South Dakota with $534, Nebraska with $554, and Idaho with $564 which ranks 5th. Regionally, Missouri costs vehicle owners $658 while Colorado averages $738.

In a press release made by Commissioner Insurance Sandy Praeger, she said that Kansas has a healthy competitive climate for insurance companies. She submitted that lower cost-per-vehicle and ranking of the state are indicative of the competitive atmosphere for insurers. To date, it is estimated that there are more than 160 auto insurance companies statewide competing for customers. Such free enterprise, she added, is beneficial for consumers.

Bob Tomlinson, state assistant commissioner, attributes two factors regarding low costs. He outlined that competition and forms of weather in Kansas are two factors contributing to low costs.

He said that there is a mixture of urban and rural drivers in the state depending upon location. Thus, on the west side, accidents are less likely to occur. Insurers are therefore able to offer different coverage and premiums depending upon an area. He referred to this as pools of insurance.

Tomlinson also added that in some places, there is a high probability of hail. Some places are deer-prone. Putting this together, high risk and low risk elements are mixed resulting in a lower average rate statewide.

The Kansas Insurance Department said that this is the 5th straight year that Kansas had been ranked as a forerunner in low cost auto insurance. With such a competition from insurance companies and its location, the streak is unlikely to be broken.