Auto Insurance Rates Rose 2.5% Last YearBy: Sean Patterson - March 26, 2014
With the individual mandate of the Affordable Care Act (aka “Obamacare”) constantly under debate in congress and throughout the country, the focus of the insurance industry in recent years has been healthcare. While the healthcare industry braced for massive changes, however, the auto insurance and homeowners insurance segments continued apace, complete with annual increases in costs.
Market research firm Perr & Knight this month released a new report estimating that auto insurance rates, on average, increased 2.5% across the U.S. This rise in auto insurance prices is slightly lower than the 3.7% increase seen during 2012. According to the firm the five-year average trend in auto insurance is a yearly increase of from 2% to 4%, putting 2013’s rate increase well within the long-term average trend.
Homeowners insurance was estimated by Perr & Knight to have increased an average of 5.1% across the U.S. as a whole last year. This increase also fits neatly into the five-year average trend of 5% to 7% increases in homeowners insurance.
“Overall, there were moderate rate increases for both auto and homeowners insurance in 2013,” sais Tim Perr, CEO of Perr & Knight. “Our RateWatch product provides visibility into these changes by accumulating the approved rate changes extracted from the public rate filings of companies representing about 80% of the personal insurance premiums written.”
The auto insurance the trend in every state throughout the U.S. last year was a rate hike. No state in the country saw an overall decrease in auto insurance costs during 2013.
The largest hikes were seen in Michigan, Georgia, New York, Delaware, and Nevada. Michigan alone saw a huge 8.6% increase in auto insurance costs last year.
For homeowner’s insurance the story was similar, though California and Hawaii did see slight decreases in homeowners insurance rates (-0.7% and 03.4%, respectively. The states with the largest increases in homeowners insurance included Oklahoma (12.1%), Florida (11%), Kentucky (10.9%), Kansas (10.3%), and North Carolina (10.1%).
Image via Thinkstock