Rise in auto insurance rates while people are driving less


04Auto insurance rates are actually on the rise even as people are driving less.  The rates have gone up after many years of stability.  It is startling to note that the rates are going up despite the fact that people are actually driving less and as a result of which there are fewer accidents.  But on the other hand, there are some insurance providers who have actually lowered rates and are even offering good discounts.

According to the US Bureau of Labor Statistics (BLS) for the average consumer the auto insurance costs have increased by about 1% in November, 2010 and it is up by 5% since last November.

Due to the bad economic conditions that are prevailing people are actually putting in fewer miles and driving around less as 98% of the American citizens actually are essentially workers and the remaining 2% don’t really make a difference on the overall effect on insurance rates as they are traveling in private jets when they are not driving in chauffeur-driven limos.

The vehicles that are in the market today have better safety features and equipment.  Hence all of this would mean that there are fewer accidents and lesser insurance claims as less money is being paid out.  In spite of this the insurers are not passing on these savings to their clients.  Insurers in New York and North Carolina have been asking for 13% hikes and the insurance regulators seem to have taken note of this.

Some of the insurers have brought down the rates quite dramatically.  Mercury is one of them and they are based in California.  This company had been a target in recent times and drew the ire of the voters in California.  This company has been facing many complaints also.  However, they want a rollback of up to 10% along with other perks like free towing facilities for those with comprehensive insurance as well as discounts for university alumni.

Progressive from Virginia prepares itself to offer discounts of up to 30% for those who are committed to safe driving.  This is based on a ‘snapshot’ where the driver’s driving habits are recorded with the help of a small gadget for a certain period of time.  The discount offered would be based on this.  Virginia is one state which has no mandatory insurance laws and this move will encourage more uninsured drivers to go for coverage.