Auto policy premiums rose by an average of 4.1 percent for drivers in the state last year.
Connecticut liability insurance is making coverage more expensive for drivers throughout the state, according to data from the Insurance Department. In fact, it is also sending homeowners insurance rates higher, though not by as much.
Last year, homeowners insurance rates increased by an average of 2.4 percent in Connecticut.
Drivers saw a 4.1 percent rise in their premiums because of the Connecticut liability insurance regulations. The Connecticut Insurance Department is responsible for an annual rates review of auto, property and casualty insurance premiums. That said, the later form of coverage is not subject to the department’s approval before it may change its premiums. Health insurers must receive the department’s approval before increases are permitted.
The annual Insurance Department study examines rate changes in terms of percentages but does not examine the average dollar premiums that auto policyholders are paying. Back in 2014, drivers in the state were paying an annual premium of about $1,030 on average. The National Association of Insurance Commissioners (NAIC) conducted a study showing that it had been the 10th most expensive state in which to insure a vehicle.
Connecticut liability insurance contributed to the state’s climbing premiums since that time.
Last year was a difficult one for auto insurance companies and their customers. The average rate in the United States increased by 3.3 percent in 2017 according to NAIC data. New Jersey saw the highest increase, bringing the average premium to $1,250 per year. New York took third place with premiums nearly reaching $1,200.
Each state has its own laws, regulations and factors affecting their rates for auto and homeowners insurance. Property and injury liability regulations vary from one state to the next and, therefore, have different impacts on premiums paid there.
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Across the country, auto insurance companies saw their worst underwriting performance in a decade and a half in 2017 according to Fitch Ratings. They pointed to a continual trend of overly aggressive pricing in attempts to draw new customers to explain the poor performance.
The hurricanes in Texas and Florida led to extensive vehicle damage, leading many to believe drivers would face a sharp auto insurance premiums spike. That said, reinsurance clauses helped to protect many insurers from the claims payments they were required to make.
Therefore, the rate hikes are explained by other factors, such as the Connecticut liability insurance requirements.