Insurance Services Group Blog

All You Ever Wanted to Know About Insurance

What’s ‘Driving’ Up Auto Insurance Rates?

SEATTLE, Wash. - Stop and go. Slow down. Speed up. If you spend any time on the roads you know just how bad the traffic is these days. Not only are there more cars on the roadways but we’re also seeing an increase in the number of accidents. From minor fender benders to deadly collisions, insurance carriers across the board have started making adjustments when it comes to auto rates whether you’re the one behind the wheel or not.

Rising Rates

If you missed it, the Seattle Times published a story this summer talking about Seattle driving behavior. According to the report, for the first time since 2010 Seattle drivers improved behavior behind the wheel over the previous year. But if that seems like something to celebrate the reporter warned…“Don’t pop the champagne corks just yet.”

The data released in the story compared Seattle drivers with drivers from the 200 largest cities across the country. Seattle moved from 184th in 2015 to 183rd in 2016 for frequency of collisions. So basically, we moved up ONE spot from last year. The study, published by Allstate Insurance, cites the average driver in Seattle will be involved in a collision every 7-years. The national average is every 10-years. Now you can see why we can’t really celebrate.

The ‘Driving’ Force

Last year, more than 38,000 people lost their lives in deadly accidents. According to the Insurance Information Institute, speed and distracted driving resulted in a quarter to a third of those deaths.

More drivers on the road, more expensive cars, more distractions, and more accidents – put all of these things together and you have a perfect storm when it comes to the insurance industry and auto rates.

On average, insurance companies are reporting between a five to 10 percent increase in insurance rates across the board – that’s among both big and small carriers.

In April, the federal government released monthly data which showed auto insurance prices increased six percent over the same time last year. According to industry analysts, it was the largest increase year- over-year since 2003.

Crushing Claims

As we continue to see the number of drivers increase and the number of accidents increase we are also seeing an increase cost in medical care following a collision. As these numbers trend up, so does the size of settlements the industry experiences as a whole. In the insurance world it’s called ‘claims severity’. In 2014, industry experts reported the average cost insurance carriers paid per bodily injury claim totaled $16,600 – that’s seven percent more than the average payout from the year prior.

Driving the Difference

As insurance carriers adjust their rates to meet today’s change in driving behavior, we expect to see more and more consumers start to shop and compare auto insurance rates. This is where, depending on the type of agent and agency you currently work with can make a difference. No company is immune from raising auto rates – it really comes down to when and by how much. The difference comes when we start to talk about access – who has access to multiple carriers and coverages.

When our clients see an increase in auto rates our team understands they will have questions and will want to see what options are available. Independent agents with access to multiple carriers takes the guess work, the shopping, and the comparing away from the client so they can focus on what truly matters – getting the best protection. When your auto rates go up you deserve to know why. You also deserve to work with someone who understands the industry and knows what’s happening across the marketplace.

You may not be able to control what happens to your rates but you should have a say when it comes to the kind of service and attention you receive – now and down the road.