People in America use their cars less compared to last year because of increasing gasoline prices. This has led to lower road accident rates, which are advantageous for auto insurance providers because there are fewer accident claims. Unfortunately, the benefits have not been translated to insurance owners because insurance rates are now much more expensive.
In New York alone, auto insurance companies are asking for a 5 to 7 percent increase in auto insurance premiums according to Michael Moriarty, deputy insurance property superintendent in New York. Moreover, the industry auto insurance industry in North Carolina is requesting for an 11 to 13 percent increase in the state alone. Auto insurance groups in Illinois have also raised their rates from 3 to 13 percent, depending on the use and location of the auto insurance holders.
In the past, the prices of auto insurances did not increase. Auto insurance rates were stable for several years. More importantly, in other states, auto rates even declined because of recent advancement in safety features of each car.
Campaigns in the past which were also geared toward fewer accidents and safety contributed to lower rates that each auto company provided. Moreover, auto insurance rates did not move because of increasing competition in the insurance market.
This year, however, saw just the opposite with more apparent increases in auto rates. The nationwide trend of auto insurance rates is increasing, according to the Insurance Information Institute. Auto insurance premiums increased by 1.7 percent for this year alone said the Institute. For some, this is only a small amount. However, if the rate is compared with that of last year’s, the increase jumped around four times before gasoline prices increased dramatically.
Increase in auto insurance alarmed a lot of people. According to Robert Hunter, an advocate of Consumer Federation of America, authorities should look and monitor why auto insurance companies raise their prices. He said that auto insurance providers should explain why the rates are increasing given that people in America are driving less compared to last year.
Hunter also added that because people are using their cars less, the claims in the event of an accident are lower. Therefore, the profit that auto insurance companies are getting becomes doubtful. He said that it is the role of the state regulators to monitor these problems. Several state regulators are now taking their steps to check if the premium increases are reasonable or not.
