According to Insurance Commissioner Adam Hamm, North Dakota state has the 3rd lowest automobile insurance rate in the entire nation.
The official results were reported by the National Association of Insurance Commissioners’ in their recently issued “Auto Insurance Database Report (AIDR) 2006/2007.” This report, though seemingly outdated, is the most recent official report from the national association.
In the report, North Dakotans pay 28 percent lower on average than the national average for auto insurance. The annual auto insurance expenditure in the sate is $657.63. The national average is $911.84.
Hamm expressed that the result is a testament to the health and competitive competence of the auto insurance market in North Dakota.
The same report also ranked District of Columbia, Louisiana and New Jersey rank as the most expensive states for auto insurance. The least expensive state is Iowa, followed by Wisconsin and North Dakota.
The average auto premiums of the states neighboring North Dakota were reportedly as follows: Montana ($830.59), Minnesota ($803.14), and South Dakota ($668.98).
The combined coverage per state is computed by means of factoring in the total cost of liability, collision and comprehensive coverage for a vehicle.
The AIDR, made available to the public in December last year, contains key statistical figures regarding automobile insurance. The Casualty Actuarial and Statistical Task Force was involved in monitoring the activities associated in the production of the report.
With the intention of helping states assess their particular insurance markets, the report looked into the costs of personal auto insurance which has drawn significant attention from policymakers and regulators.
The AIDR, according to an official press release, was made available “with information related to insurance markets, traffic conditions, medical costs, crime rates, automobile repair costs, economic conditions and state laws related to automobile insurance.”
Trends, in the AIDR, were derived from earned premiums, earned exposures, incurred losses and incurred claims.
Per state, average premium and average expenditure, pure premium, loss ratio, claim frequency and claim severity were calculated by coverage.
The press release clarified that the data presented “may differ from data contained in reports from previous years, as the statistical agents periodically obtain updated information from insurers.”
Moreover, there are other portions in the report which provide statistics for each state on non-insurance characteristics that might in someway affect the expenditures of personal automobile insurance.
The AIDR allows interstate comparisons to be made available. Such comparisons would be vital since auto insurance premiums comprise of a varied set of state specific factors which are related to insurer claim costs.