Auto Insurance Rates Constantly Change

Where have rates changed the most?

One of the most frequent questions I am presented is “Why have my Auto Insurance Rates gone up?”  It’s a magical question that any magician could have fun with but there is only a couple of answers that make sense.

First, Auto Insurance Rates go up because the cost of the goods and services we buy and use to run the company and pay for claims repairs go up.  In other words, inflation that affects everything you buy from groceries, to gasoline, to carpet, to car parts, go up as companies raise their prices on the goods and services we buy.

Second, Auto Insurance Rates go up because the claims we have paid exceed the premiums we collect.  Insurance companies use the premiums we pay to pay claims and operate the company.  There is no more magic to insurance than this.  While companies maintain reserve capacity to absorb unusual claims events, this reserve is a measure of the safety of the carrier.  A small part of every dollar you pay for insurance is deposited into a statutory reserve account that governmental regulators and watch-dog agencies require the company to maintain for financial stability.

During the last 24 months the weather, hail and water damage is cited as the most frequent reason for Auto Insurance claims.

Generally, the trend in Auto Insurance Rates is for the cost of insurance to go up if for no other reason than the general inflation rate in our economy causes all goods and services to increase.  A recent study was completed that helped take a look at where Auto Insurance Rates are rising the fastest, and where the fell the most.  On a state by state basis, here are the states with Auto Insurance Rates rising the most, and those that fell the most.   Ohio was not among those seeing the rates drop of fall and Ohio Auto Insurance Rates were relatively flat over the last year on a statewide basis.

Small increases or decreases in Auto Insurance Rates are common as the many carriers in a state adjust the rates in territories and jockey for competitive position.  Last year Donegal Mutual adjusted rates in some Ohio territories to align more closely to competitors and gain advantages where they want to grow. On the other side of that some territories saw overall increases in rates due to loss trends and results.  The general trend for rates is up on inflation alone.  Big rate changes within a State or territory may reflect changes of law but are most often a reaction by the insurance industry to loss results.  The loss results depicted above are most likely a reflection of loss results.  Most of the states showing an overall rate decrease on Auto Insurance Rates reflect competitive adjustments that have likely occurred because loss results were better than expected.

Insurance Associates Agency Inc. is a licensed Ohio insurance agency offering most lines of insurance from its offices in West Chester, OH.  We represent many companies as an independent professional agency.  We observe office hours Monday through Friday from 9-5 and are available at other times by prearranged appointment.  Call us at (513) 779-7920.  Ask for Terry McCarthy.  He has 37 years experience in most personal and business insurance topics and is a great resource for those looking for another insurance opinion.  The chance of saving money after talking with us is better than average.  Call today.

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