Auto Insurance Rates

Automobile insurance companies in Georgia are all singing a very similar song, auto coverage is unprofitable! Underwriters have experienced nearly ten (10) years of combined ratios above 100%. (A combined ratio is loss ratio (claims/premiums) inclusive of investment income). The numbers vary slightly form company to company, but all agree that it is an issue.

Factors that are contributing to the poor performance of automobile insurance include:

  • Distracted Driving
  • Increased Cost to repair (parts are up 130% from 2014 and labor up 18%)
  • Increasing litigious environment (Georgia’s auto fatality rate has increased at a pace of nearly three (3) times the rest of the country)

What does all this mean? You can expect to see auto rates increase in the future. There are a few things that you can do to mitigate the impact on your personal premium:

  1. Place coverage with a carrier that write a 12-Month policy instead of a 6-month. When rates are increasing, 6-month carriers get to increase your rate twice.
  2. Avoid filing small claims. Most carriers count a $500 claim the same as a $50,000 claim at renewal. Several small claims has a larger impact on premium then one large claim. Set your deductible higher and avoid small claims (even glass and towing claims can impact your premium).
  3. Take a Defensive Driving Course and send the certificate to your agent
  4. Check with your agent to see if your carrier offer a discount for using a telematics device. Many companies will discount your premium if you sign up for their smartphone app or install their device.
  5. Pay Premium Annually. Many companies are offering deep discounts for customers to pay their premium annually at renewal instead of via installments. The more frequent the installment, the more you usually end up paying.

Personal Auto-Why Premiums Are Increasing