Auto insurance rates have been on the rise for the past 25 years
The Consumer Federation of America has released a new study highlighting auto insurance rates throughout the U.S. According to the study, auto insurance rates have been on the rise for the past 25 years. The only state that has shown any significant average decrease in these rates has been California. As auto insurance rates continue to rise throughout the country, coverage may be getting too expensive for some drivers to afford. This could lead to many people going uninsured, which could create significant financial problems for those that are victim of car accidents and other such disasters.
California drivers see some reprieve from rising insurance rates
The study shows that auto insurance rates nationwide have increased by an average of 43% over the past 25 years. California is the only state in which rates have decreased to some degree, largely due to the state’s policies concerning auto insurance regulation. The state is home to several policies that are designed to guard against anti-consumer practices. These policies have helped keep auto insurance rates relatively low, though rates for some drivers have increased due to liability issues.
Many insurers can raise rates without approval
The study notes that insurance companies in many states are able to raise rates on coverage without first receiving approval from regulators. The Consumer Federation of America suggests that this discourages rate competition, as insurers are able to issue premium increases as they see fit. Such practices have been decried by consumers, many of whom have issued complaints to state and federal regulators, petitioning them for some sort of relief.
No fault laws cause spikes in auto insurance rates
Many states boast no-fault auto insurance rules, which require insurers to provide benefits in the event of car accidents no matter what party is to blame for the accident itself. Such rules have led to an increase in auto insurance rates in these states as insurers look to mitigate the losses they see from car accidents. No fault rules have also led to an increase in fraudulent activates, which also has an impact on auto insurance rates.