According to an InsWeb Corp. study, prices for auto insurance nationwide continued to rise in the third quarter of 2002, representing a seven percent increase year over year.
The index grew less than one percent on a sequential basis, however, indicating that prices may be stabilizing for the near-term. Reasons for the industry’s steady rate increases include rising claims costs driven primarily by medical costs, significantly higher vehicle repair costs, rising jury awards and continued fraud and abuse. Additional causes may include lower investment income generated by insurers, mainly due to the dramatic reduction in interest rates and the decline in the stock market.
InsWeb’s data for the third quarter of 2002 also revealed an apparent shift among carrier offerings to consumers in the “Over 30” age group, traditionally considered America’s safest drivers and the industry’s most preferred customers.
While these consumers continue to be offered a greater number of 12-month policy quotes and lower than average premiums, data from InsWeb’s marketplace indicates that these age groups experienced the highest increase in premiums in the third quarter as compared to the second quarter of 2002.
Additionally, as in the second quarter of 2002, the majority of quotes viewed by consumers during the third quarter of 2002 were for six-month policies. Nearly 60 percent of the roughly 1.3 million quotes viewed were for six-month policies, as compared to less than 44 percent during the same period last year.
“The good news for consumers is that the rate of increase has slowed, but conversion to six-month policies continues apace, and now drivers of all ages are feeling the impact of this year’s rate hikes,” Hussein Enan, Chairman of InsWeb Corporation, commented. “Now more than ever, consumers of all ages need to research offerings from competing providers to ensure that they are getting the best possible rates and terms. Conversion to a six-month policy can impact an individual policy-holder’s annual costs by up to 40 percent.”
Was this article valuable?
Here are more articles you may enjoy.