The research determined that auto coverage has become more affordable for people at all levels of income.
A recent study that was conducted by the Insurance Research Council (IRC) has determined that automobile insurance is becoming more affordable and that this trend has been maintained over the last ten years, particularly for individuals within the lower and middle income ranges in the United States.
Every state except for six experienced improvements in their affordability from the 1990s to the 2000s.
Among all of the states and the District of Columbia there was increasing affordability observed in the auto insurance figures from 2001 through 2005 and again from 2006 through 2010. Within the study, the IRC conducted an analysis of the data regarding coverage expenditures that was provided by the National Association of Insurance Commissioners, and compared them against the U.S. Census Bureau income data. This allowed them to conduct measurements and tracking of changes in the affordability of these policies.
The automobile insurance affordability was determined through a ratio of average spending to income levels.
In order to better comprehend the conditions and factors that could have had an impact on the affordability of the coverage, the IRC made use of a multivariate statistical model. The model indicated that the improvements in affordability for vehicle coverage were linked with greater competition within the market, reduced pricing regulation, smaller residual markets, a decreased rate of uninsured drivers, moderate injury compensations, and lower rates of unemployment.
According to the IRC director of research, Patrick Schmid, “There has been increased interest from policymakers and others regarding auto insurance affordability over the past few years; and yet, little factual evidence has been brought to bear on the issue.” He went on to explain that this research has provided a way in which to objectively measure the changes in the affordability of this coverage in each of the states across the country.
The outcomes have suggested that there have been improvements in this area, over the years, and that this can help to identify a number of explanations for these better automobile insurance rates, said Schmid.
