Facts + Statistics: Auto insurance | III

Costs and expenditures

The countrywide average car policy outgo rose 5.0 percentage to $ 1,056.55 in 2018 from $ 1,006.33 in 2017 according to the National Association of Insurance Commissioners. In 2018 ( the latest data available ), the median expending was highest in Louisiana ( $ 1,545.82 ) followed by Michigan ( $ 1,469.73 ), and the District of Columbia ( $ 1,429.43 ) .
To calculate average expenditures the National Association of Insurance Commissioners ( NAIC ) assumes that all insure vehicles carry liability coverage but not necessarily collision or comprehensive examination coverage. The modal outgo measures what consumers actually spend for policy on each vehicle. It does not equal the summarize of liability, collision and comprehensive expenditures because not all policyholders purchase all three coverages. The average outgo measures what consumers actually spend for insurance .
AAA ’ sulfur 2020 Your Driving Costs study found that the average cost to own and operate a 2020 model vehicle was $ 9,561 in 2020. The average indemnity cost for metier sedans was $ 1,245, down from $ 1,251 in 2019. AAA indemnity cost estimates are based on a wide coverage policy for a driver who is under 65 years of senesce, has more than six years of driving experience, has had no accidents and lives in a suburban/urban location. The coverage is for a policy with $ 100,000/ $ 300,000 personal indebtedness, $ 25,000 medical, $ 100,000 property and $ 25,000/ $ 50,000 uninsured/underinsured motorist coverage, with a $ 500 deductible for collision and comprehensive examination claims. These figures are not comparable with the National Association of Insurance Commissioners ’ car expenditures data, below .

Auto insurance expenditures, by state

The tables below indicate estimated average expenditures for secret passenger automobile insurance by state from 2014 to 2018 and provide approximate measures of the relative cost of car insurance to consumers in each country. To calculate average expenditures, the National Association of Insurance Commissioners ( NAIC ) assumes that all insured vehicles carry liability coverage but not necessarily collision or comprehensive examination coverage. The average consumption measures what consumers actually spend for insurance .
Expenditures are affected by the coverages purchased adenine good as other factors. The NAIC does not account for policyholder classifications, fomite characteristics or the sum of deductibles selected by the policyholder, differences in state car and tort laws, rate filing laws, traffic conditions and other demographic variables, all of which can significantly affect the cost of coverage. The NAIC notes that three variables—urban population, miles drive per count of highway miles, and disposable income per capita—are correlated with the state car policy premiums. It besides notes that high-premium states tend to besides be highly urban, with higher wage and price levels, and greater traffic concentration. many other factors can besides affect car indemnity prices .

Top 10 Most Expensive And Least Expensive States For Auto Insurance, 2018 (1)

( 1 ) Based on median automobile indemnity expenditures .
source : © 2021 National Association of Insurance Commissioners ( NAIC ) .
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Average Expenditures For Auto Insurance By State, 2014-2018

( 1 ) Ranked highest to lowest by average expending .
note : average expenditure=Total written premium/liability car years. A car class is peer to 365 days of guarantee coverage for a individual vehicle. The NAIC does not rank department of state average expenditures and does not endorse any decision withdraw from these data .
source : © 2021 National Association of Insurance Commissioners ( NAIC ) .
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Auto Insurance Affordability

Louisiana, Florida and Michigan are the least low-cost states for car insurance, while Iowa is the most low-cost express, according to a new learn from the Insurance Research Council ( IRC ). The reputation, Auto Insurance Affordability : Countrywide Trends and State Comparisons, looks at the car policy expending share of income, which ranges from a abject of 1.02 percentage in Iowa for 2018, the latest datum available, to a high of 3.09 percentage in Louisiana. U.S. households on average spend 1.67 percentage of their income on car indemnity. The IRC developed an affordability index based on average car insurance expenditures published by the National Association of Insurance Commissioners ( NAIC ) ( see charts here ) and medial family income from the U.S. Census Bureau. According to the IRC, Louisiana, Florida, and Michigan have maintained their respective rankings as the first, moment, and one-third least low-cost states since 2014. The IRC notes that since the index is a ratio, some states with high average car indemnity expenditures rate lower on the affordability rankings because of higher-than-average median income ( such as DC ), while early states are pushed up the ranks of least low-cost states by having low median family income ( such as Mississippi ). The analysis discusses the affordability of car insurance for the overall population and does not address the issue of affordability among underserved populations .

Average Auto Insurance Expenditures As A Percent of Median Household Income, 2018 (1)

( 1 ) Data are for IRC ‘s affordability exponent based on average car insurance expenditures published by the National Association of Insurance Commissioners ( NAIC ) ( see charts here ) and median family income from the U.S. Census Bureau .
source : Auto Insurance Affordability : Countrywide Trends and State Comparisons, Insurance Research Council .

Premiums

Private Passenger Automobile Insurance, 2011-2020

( 1 ) After reinsurance transactions, excludes state of matter funds.
( 2 ) After dividends to policyholders. A neglect in the aggregate ratio represents an improvement ; an increase represents a deterioration.
( 3 ) Calculated from unrounded numbers .
source : NAIC data, sourced from S & P Global Market Intelligence, Insurance Information Institute .
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Top 10 Writers Of Private Passenger Auto Insurance By Direct Premiums Written, 2020

( $ 000 )

( 1 ) Before reinsurance transactions, includes country funds.
( 2 ) Based on U.S. sum, includes territories .
informant : NAIC data, sourced from S & P Global Market Intelligence, Insurance Information Institute .
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Auto claims

Liability insurance pays for the policyholder ’ mho legal province to others for bodily injury or place damage. collision and comprehensive insurance screen property damage and larceny to the policyholder ’ second cable car.

Incurred Losses For Auto Insurance, 2016-2020 (1)

( $ 000 )

( 1 ) Losses occurring within a situate period, whether or not adjusted or paid during the same period, after reinsurance transactions .
source : NAIC data, sourced from S & P Global Market Intelligence, Insurance Information Institute .
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The shared/residual market and nonstandard markets

All states and the District of Columbia use special systems to guarantee that car indemnity is available to those who can not obtain it in the private market. These systems are normally known as assigned gamble plans. Assigned gamble and early plans are known in the policy industry as the shared, or residual, market. In assigned gamble plans, bad policyholders are proportionately assigned to insurance companies doing business in the express. In the voluntary, or regular, market, car insurers are free to select policyholders .
Motorists can besides obtain car indemnity from the nonstandard assign of the private market. The nonstandard marketplace is a niche market for drivers who have a worse than average repel read or drive speciate vehicles such as high-powered sports cars or custom-made cars. It is made up of both little peculiarity companies, whose only business is the nonstandard market, and long-familiar car indemnity companies with nonstandard divisions. AM Best estimates that the nonstandard car marketplace generated $ 16.9 billion in send premiums in 2019. The market consists of about 130 by and large small- to medium-sized insurers whose nonstandard car premiums account for more than 50 percentage of their sum net premiums written .

Insured Vehicles

In 2015, 203 million secret passenger vehicles were insured in the United States excluding Texas, up from 198 million in 2014, according to latest data available from AIPSO. The figures include cars insured by individual car insurers in the volunteer market angstrom well as those insured in the alleged shared or residual markets set up by states to cover hard-to-insure risks. In 2015 California had the most insured private passenger cars ( 26.3 million ), followed by Florida ( 12.7 million ) and New York ( 9.6 million ), including vehicles in the voluntary and remainder markets .

Collision losses

The chart below shows the claim frequency and average loss payment per claim and average passing requital per cover fomite year under collision coverage for late exemplar vehicles. The call frequency is expressed as a rate per 100 insure vehicle years. A vehicle year is equal to 365 days of indemnity coverage for a single vehicle .

Passenger Vehicle Collision Coverage Insurance Losses, 2018-2020 Model Years

( 1 ) Per 100 guarantee vehicle years.
( 2 ) Represents the average loss payment per see vehicle class.
( 3 ) Includes minivans.
( 4 ) Includes claims from cargo/passenger vans .
reservoir : Highway Loss Data Institute .
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Consumer prices

The Bureau of Labor Statistics consumer price exponent ( CPI ) tracks changes in the prices paid by consumers for a representative basket of goods and services. The cost of animation ( all items ) rose 4.7 percentage in 2021. The cost of motor vehicle indemnity increased 3.8 percentage after a 4.6 percentage decay in 2020, when drivers reduced their tug due to the COVID-19 pandemic. The monetary value of tenants and family insurance declined slightly, down 0.3 percentage. Used cars and trucks increased a significant 26.6 percentage and the median price of a single-family home increased 17.7 percentage and closely 100 percentage since 2012 .

Consumer Price Indices For Insurance And Related Items And Annual Rates Of Change, 2012-2021

( foundation : 1982-84=100 )

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Consumer Price Indices For Insurance And Related Items And Annual Rates Of Change, 2012-2021 Cont’d)

( base : 1982-84=100 )

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Consumer Price Indices For Insurance And Related Items And Annual Rates Of Change, 2012-2021 (Cont’d)

( nucleotide : 1982-84=100 )

( 1 ) December 1996=100.
( 2 ) December 1983=100.
( 3 ) December 1997=100.
( 4 ) alone includes insurance covering rental properties.
( 5 ) Includes appliances, reupholstery and inside home alimony .
NA=Data not available.

note : percentage changes are calculated from unrounded data .
reference : U.S. Department of Labor, Bureau of Labor Statistics ; National Association of Realtors .
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