Differences in Auto Insurance Rates Among The States
Automobile insurance rates are changing throughout the country, but while some states show people paying less than those in another state and accordingly dropping further down the list from most expensive to least expensive, overall rates are increasing.
Comparing the 2009 report of the www.insure.com to the 2013 report, the rates for the current highest ranked state, Louisiana, jumped from $2,453 per annum to $2,699 for an increase of $256. However, in 2009, Louisiana was ranked second behind Michigan. According to another 2009 study conducted by the National Association of Insurance commissioners, Louisiana ranked first that year.
Looking at the neighboring state of Texas, which had a rate of $1,022 and was ranked in the 11th highest spot in the 2009 study by the National Association of Insurance Commissioners, but now comes in as the 19th most-expensive state with an annual cost of $1,545 or an increase of $523 over the four-year period, according to the www.insure.com report.
According to the 2013 report of www.insure.com, the difference between the highest state, Louisiana and the lowest state Maine was $1,765. Simply stated residents of Louisiana were paying nearly three times more than the residents of Maine.
Reasons for the Differences in Auto Insurance Rates
The Insure.Com website, reports the reasons for the differences. Regarding Louisiana, the people in that state, who are involved in an accident, file more bodily insurance claims that drivers in the other states.
The website, (http://www.insure.com/car-insurance/car-insurance-rates.html) states that Louisiana also has a high rate of comprehensive claims, which include damage from natural disasters, according to statements attributed to R. Parke Ellis state president-elect of the Independent Agents & Brokers of Louisiana.
Furthermore, the statistics show that people in Louisiana hire more attorneys for property damage cases. This is because Louisiana’s judicial system has some unique characteristics. In Louisiana claims under $50,000 go before judges instead of juries. Some observers, according to the report, contend that elected judges side with local people than insurance companies.”
Apparently, population density, number of cars on the road, the chance for natural disasters, such as the hurricanes which frequently hit Louisiana and other Gulf Coast states, have an impact on insurance claims.
Other factors that affect insurance rates include:
• The age and marital status of drivers. Everyone assumes that young male drivers pay the highest rates. According to Insurance. Com. The actual fact is insured drivers younger than 25, regardless of marital status, and unmarried women under the age of 21 pay higher rates, while drivers over 50 may get a discount..
• The type of cars can have an impact on rates, because luxury, high-performance and sports cars are more expensive to repair.
• Drivers pay a higher rate when the car is kept in an urban area instead of a rural area, because urban drivers usually have more accidents than those in rural areas.
• How the car is use is another factor. Those cars used for pleasure will attract a lower rate than cars used for driving to and for work or used for business.
According to web stores from 2009 and 2013, many of the factors that affect automobile insurance have not changed. However, the severity of those factors, more expensive cars, more frequent accidents and more drivers have all been a factor in auto insurance prices increasing.
Another factor to consider is the number of leased vehicles on the road today. People leasing cars are required by the leasing company to carry higher levels of insurance. Leasing offers some advantages such as lower monthly payments, but must also pay higher insurance premiums because of the required increased in coverage.
Therefore, based on the available data, car insurance rates are going to vary from state to state for a number of reasons ranging from how the judicial system works in one state, and the population density in another state.
Read about how the rising car insurance rates have been driving down motorists’ enthusiasm.