Rate Setting

Slide deck: Personal automobile insurance rates, October 2016

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Personal automobile insurance: More accidents, larger claims drive costs higher

Over the past two years, both the accident rate and the size of insurance claims have climbed dramatically. These are the largest and most volatile components of auto insurance. This white paper documents the increase in costs, suggesting some factors that may be causing the increases. The paper also discusses what insurance companies are doing to keep costs in check and what consumers can do to reduce the cost of their own insurance.

 

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Background on: Pay-as-you drive auto insurance (telematics)

What is telematics?

Background on: Compulsory Auto/Uninsured Motorists

Overview

Virtually all states require drivers to have auto liability insurance before they can legally drive a motor vehicle. Liability insurance pays the other driver’s medical, vehicle repair and other costs when the policyholder is at fault in an accident. State laws set the minimum amounts of insurance or other financial security that drivers must pay for the harm caused by their negligence if an accident occurs. The public generally supports compulsory auto insurance and wants these laws enforced.

Facts + Statistics: Auto insurance

Costs and expenditures

The countrywide average auto insurance expenditure increased 1.4 percent to $1,062 in 2021 from $1,046 in 2020, according to the National Association of Insurance Commissioners. In 2021 (the latest data available), the average expenditure was highest in New York ($1,511), followed by Louisiana ($1,500), and District of Columbia ($1,435).

Facts + Statistics: Uninsured motorists

Uninsured and underinsured motorist coverage reimburses policyholders in an accident involving an uninsured, underinsured or hit-and-run driver. Twenty states and the District of Columbia have mandatory requirements for uninsured or underinsured motorist coverage. More than half of the states have passed laws and begun to develop and implement online auto insurance verification systems to identify uninsured motorists.