Lower Rates Advised despite Low Insurance Average


Recent studies have revealed that the national average for auto insurance premiums is at its lowest level in more than a year. The news gave car owners across the U.S. something to cheer at despite the economic gloom. Analysts say that ongoing price wars among insurance providers are keeping premiums down. However, experts say that motorists should not be complacent and instead make use of the momentary improvement to find better insurance rates.

Lower Rates Advised despite Low Insurance AverageAt present, the national average for car insurance stands at $1,871. In some states and urban centers, however, the figure is much higher. For instance, insurance rates as high as $4,000 are not unheard of in Detroit, Michigan. Because of this, specialists recommend looking for more affordable insurance policies even with promising figures.

With the jobless rate still bleak, analysts say that the U.S. can expect to see more uninsured and underinsured drivers on the road. To make up for the increased probability of policyholders getting involved in an accident with these motorists, insurers have to increase premiums. Experts agree that if the economy fails to show signs of genuine improvement, the unemployment numbers may soon rise, leading to more uninsured drivers and eventually, higher rates.

To cut back on insurance expenses, motorists are advised to refresh their understanding of how the auto industry works. Experts say that policyholders have to be aware of the many criteria and factors that insurance providers rely on to come up with rates. Knowing how insurers come up with premiums can go a long way in helping policyholders take back control of their insurance costs.

The primary consideration insurance companies pay attention to is the type of car a policyholder drives. Different car models have different safety histories, track records, and other performance issues. Some vehicles are relatively safer than other cars while other perform poorly when it comes to safety. High performance sports cars and luxury vehicles are considerably more expensive to insure because of their nature and cost to repair. Typically, a vehicle whose parts are harder to find can mean higher insurance costs.

Larger SUVs can also mean a higher probability that they can inflict injury if they get into an accident. Insurers have to prepare for this possibility, hence the high liability amount and premiums. Because they pose more of a danger to other motorists on the road, larger vehicles are often tagged as high risk and often come with hefty insurance prices.