Auto insurance rates set to move north


07Drivers have been enjoying some goodies from their insurance companies in the last few years.  During 2009 many families reportedly spent much less on auto insurance for five consecutive years and this trend has been continuing right up to the first half of 2010.  On an average families spend around $I, 789 on auto insurance according to Rate Watch, and it is down by 5% since June last year with an annual average of $1, 884.  While this is some good news for drivers, there are still some families in some parts of the country who are seeing a steady increase in auto insurance rates.  This has also been outlined in the report by Rate Watch as drivers in around 14 states have observed an increase in rate quotes between April 2010 and June 2010.  The states that have started seeing increased rate quotes are Utah, Delaware, New Hampshire, Michigan, Alabama, and Idaho.

What this means in future is something that no one is sure of as questions remain unanswered.  Experts are still analyzing data that has been collected through the 2010 statistics and are looking for trends which will help them give a forecast on auto insurance rates for the year 2011.  However, the main issue here is that there seems to be no definitive answer with all the data that has been received.  The motor vehicle accidents have been on the decline since 1980 and are down by 40%, while the traffic fatalities have also gone down by 8%.  These drops in rates are good to see but these are just a fraction of the auto insurance rates.

Risk is one of the main factors that are taken into account with auto insurance policies and with the current economic situation, unemployment rates, etc drivers might start seeing an increase in rates.  The other factor that will cause an increase in rates is the hospital cost shifting. Since these hospital bills also add to the overall cost while managing auto insurance claims, there could be an increase in premiums after analyzing and negotiating hospital bills.  As per the report that was released by IRC in March 2010, it has been estimated that the claims including hospital cost shifting and bodily injury (BI) in around 38 tort and add-on states was more than $1.2 billion due to excess hospital charges in the year 2007.  The increase in auto repair costs and insurance fraud is also another contributing factor to hike in insurance rates.