Across the nation, auto insurance premiums have increased by an approximate 1.7% this year according to the Insurance Information Institute despite Americans using their car less due to gasoline prices.
For example, in New York they’ve seen a 5 to 7% proposed increase, while in North Carolina it’s 11 to 13% and Illinois already raised theirs by 3 to 13%.
With people driving less, the number of road accidents are lessened which results to fewer claims and in turn is beneficial to the auto insurance providers. However, rates are going up and even if the percentage of increase might seem low, it is four times higher before the price of gasoline went of the ceiling.
This move by auto insurers is questioned because rates have been declining in the past few years due to car safety features and road safety campaigns. Moreover, there are a lot of new players so competition is going up and this should level up the pricing.
Many are requesting for their state legislators to take a look at the alarming increase because the present condition should have made the auto insurers lower their rates but the opposite is happening. They are requesting for monitoring and regulation because the trend is unusual given that the less driving public is less prone to road accidents which would have the rates in lower, or even just a stable rate.
Consumer Federation of America’s Robert Hunter expressed that the income of the auto insurers are in question because they are asking for an unnecessary increase and that their consumer should understand the need for the said rate hike to fully understand its necessity.
Regulations vary by state and some implement auto insurance depending on the vehicle use and location of the insured car owner.