Auto Insurance Rates On The Rise – Except Where They’re Not
According to some news, auto insurance rates are going up after several years of relative stability. This is happening despite the fact that people are driving less and as a result, having fewer accidents.
On the other hand, it seems that some auto insurance coverage providers are actually lowering rates and offering substantial discounts.
Going Up
The U.S. Bureau of Labor Statistics (BLS) has recently reported that for the average consumer, car insurance costs jumped by almost 1% in November of 2010 – and are up more than 5% since the previous November.
What’s amazing about this is that people in general are putting fewer miles on their vehicles, largely due to the poor economic conditions that are faced by 98% of Americans who actually work for a living. (On the other hand, the 2% who have never had it so good really don’t have much of an effect on auto insurance prices – if they’re not riding around in chauffeur-driven limos, they’re traveling in private jets, after all).
Another factor is that today’s vehicles have more and better safety equipment. All of this means fewer claims for insurers, and less money they’re paying out. Yet these insurers are often not passing the savings on to consumers. Insurance companies in New York, North Carolina and Illinois have been asking for rate hikes of up to 13% in recent months.
This has not only caused some concern among consumers – it’s gotten the attention of state insurance regulators as well.
Going Down
There are some insurance companies that are actually lowering their rates, however – in some cases, dramatically.
One of these is Mercury, a large California auto insurance company. This company recently drew the ire of California voters when it was revealed that it was pouring millions of dollars into a campaign for legislation that would have ultimately harmed consumers – and the company itself has been the target of many complaints.
Today, they are seeking to roll back insurance prices by up to 10% in addition to other “perks” such as free towing for those with comprehensive car insurance and university alumni discounts.
Meanwhile, in Virginia, Progressive is preparing to offer discounts of 30% for drivers who demonstrate a commitment to safe driving practices. This will be based on a “snapshot,” in which the driver carries a small tracking device plugged into the onboard diagnostic (OBD) port for thirty days. The discount will be based on the information collected regarding the customer’s day-to-day driving practices. Virginia is one of the states that has no mandatory insurance law; perhaps these discounts will encourage more uninsured drivers in that state to get coverage.
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