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Rates and Premiums blog
How much one at-fault accident raises your rate in different statesQuote studies put one at-fault accident anywhere from about 17% to 71% by state. What the samples assume, which states cap surcharges, and why averages mislead.How an actuary builds a statewide auto rate: a worked indicationOne invented insurer, round numbers, every step of a rate indication: development, trend, permissible loss ratio, credibility, and indicated versus selected.Attorney involvement in auto claims and what it does to claim costsWhat Insurance Research Council data show about lawyers in auto injury claims, why the pay comparison is hard to read, and how to weigh hiring one.Base rates and relativities: how a premium is multiplied togetherA worked premium for a fictional driver shows how a base rate and a chain of relativities compound, and why one factor can move your price more than expected.Billed vs paid medical bills: collateral source rule and LOPsWhy a $38,000 hospital bill can settle as $9,500, which number a jury may hear in each state, how letters of protection work, and what an injured driver nets.The CPI for motor vehicle insurance: how price change is measuredWhere the "car insurance rose X%" headline comes from, how BLS follows a fixed set of policies each month, what the index leaves out, and how to read the table.Body style and insurance: sedans, SUVs, minivans and coupesBody style tracks claims through size, price, theft appeal and who drives. What HLDI loss data show for sedans, SUVs, minivans and coupes, and how to use it.Can your insurer raise your rate in the middle of a policy term?A mid-term bill change is legitimate in only a few cases, each tied to facts about you or your car. How to tell which and what to do if it looks wrong.Car insurance myths: color, make, model year and horsepowerRed cars, brand names, horsepower and new-car prices: what insurers really use to rate a vehicle, what loss data show, and how to test a claim with quotes.Car insurance with poor credit: ways to lower the billIn most states insurers price on a credit-based score. Check your report for errors, ask for a re-score or a life-event exception, and shop across insurers.Claim frequency vs severity: which one actually moves premiums?Fewer crashes do not guarantee cheaper insurance. Frequency and severity multiply into loss cost, and since 2020 higher severity has outweighed lower frequency.Do car insurance quotes hurt your credit score?Insurers check credit for a quote with a soft inquiry that credit scores ignore. What gets pulled, what is recorded, and where credit is off limits.Does high mileage on the odometer raise your insurance rate?The odometer reading mostly sets what the car is worth, not your rate. Annual driving distance is the rating factor. How each works and how insurers check.Fact-checking car insurance headlines about percent increasesA nine-point checklist applied to five kinds of headline claim, with the source documents behind each, to turn a national percent into a number for your policy.Crash statistics and premiums: reading NHTSA FARS and IIHS dataWhy traffic-death totals from NHTSA and IIHS do not set your premium, what FARS counts, and how crash data reach rates only through claims.Fight the ticket or pay it: the insurance mathAdd up the fine, the premium surcharge over the look-back period and the cost of contesting, then weigh the odds. A worked table of three hypothetical tickets.Hard and soft markets: why car insurance prices move in cyclesHow personal auto prices swing between tight and loose markets, what the combined ratio shows at each stage, and how a shopper can read the signals.How a car's age changes the price of each coverageCollision and comprehensive fall as a car ages, but slower than its value; liability, medical and uninsured motorist charges barely move. A line-by-line walk.How a claim reaches your CLUE report and your renewal priceNot every call to your insurer is a claim, but a reported loss can sit in claims databases for years. What gets recorded, who sees it and how to fix errors.How a redesign changes a car's insurance rating group and your premiumA redesigned model starts with an insurance symbol built from its price and look-alike cars, then moves as claims arrive. How that works and how to check first.How car insurance rates change from age 65 to 85Why premiums often dip in the late 60s and creep up after about 70: per-mile risk, claim severity, mileage, a clean record, and how to read your renewal.How insurers set claim reserves and why reserve changes move ratesA claim reserve is the insurer's estimate of what it still owes on claims. How case reserves and IBNR are set, and how a shortfall can lead to higher rates.How multiple tickets and accidents stack on a rating planWhy a second ticket can cost more than the first: point weights, look-back periods, lost discounts and tier cutoffs, walked through with published state plans.How regulators oversee algorithms and AI in car insuranceExisting rate, trade-practice and claims laws already reach algorithms; here is the NAIC model bulletin, Colorado's rules, state examples and what you can ask.How to read a car insurance rate filing on SERFFWhere the public can open an insurer's auto rate filing, what each part shows, how to find the requested change and trend assumptions, and what stays hidden.Improving your insurance score and getting your rate re-ratedWhat moves a credit-based insurance score, how to ask for a re-rate, which states limit credit use, and how long an improvement takes to reach your premium.Insurance in EV vs gas total cost of ownership: a worked exampleHow to put insurance into an EV-versus-gas cost comparison: pair like-for-like cars, read quotes carefully, and see when the premium gap eats the fuel savings.Do interest rates and investment income change your premium?How insurers earn money on premiums before claims are paid, how regulators count it in rates, and why higher yields do not simply lower what you pay.Labor rates and paint costs: why the same repair has different pricesTwo estimates for one dent can differ by hundreds of dollars. See how labor hours, hourly rates, paint, parts and sublets add up, and who decides the number.Luxury car insurance: what drives the premium and what you controlPrice, parts, sensors and glass drive most of a luxury car's higher premium; liability limits should track your assets. What is fixed, what you control.How medical costs and injury claims shape what you pay for liabilityWhy bodily injury, PIP and MedPay prices keep rising even when your car is fine: health-care prices, treatment patterns, fee schedules and slow-settling claims.Merging two car insurance policies after marriage: should you?Merging saves many couples money, not all. How marital status is rated, whose record counts, timing and refunds, with one merge that saves and one that costs.Miles driven, gas prices and claim frequency: why premiums followHow driving volume, gas prices and the 2020 drop in miles moved crashes and claims, why deaths per mile rose anyway, and why rates react years after the claims.Aluminum, high-strength steel and composites: why repairs cost moreLighter, stronger materials protect occupants and save fuel, but many cannot be pulled or heated back into shape. See what that does to repair bills and totals.Can a not-at-fault accident raise your premium?Where the law bars surcharges for crashes you did not cause, where it does not, and the other reasons a renewal can rise after someone else hits you.How premiums change with age: the U-shaped curve from 16 to 85Insurance cost per car falls from the teen years to the early sixties, then climbs again. What loss and crash data show, why, and what drivers can control.Price optimization: why regulators barred charging what you'll payWhy regulators said pricing by willingness to pay is unfairly discriminatory, what insurers had to do, what stayed legal, and how to question a renewal price.Pricing a rideshare endorsement: what drives the costWhy rideshare add-ons cost so differently from driver to driver, how they compare with hybrid and commercial policies, and a way to compare quotes.Pulling your own records: CLUE, MVR and claim fileHow to request your CLUE report, driving record and insurer file, what each shows, how long entries last, and how to dispute errors under the FCRA.From filing to your bill: the timeline of an auto rate increaseFollow one hypothetical rate increase from actuarial analysis to filing, approval, new-business and renewal effective dates, and the notice you should receive.Rate hearings and intervenors: how the public challenges an increaseIn most states staff review decides an auto rate increase. California lets the public petition and intervene; two dated cases show what that changed.Rating factors some states have banned: gender, credit, occupationWhich states bar gender, credit, marital status, occupation or education in auto rates, how partial bans work, and what a banned factor does to premiums.Reinsurance for auto insurers: quota share and excess of lossInsurers buy insurance too. What the two main reinsurance structures do, how they touch a driver's claim and rate, and what happens if a reinsurer fails.Does a rideshare accident hurt your personal record and premium?Which insurer handles a ride-related crash, what reaches your CLUE report and driving record, and what a rideshare endorsement does to your rate.Uninsured drivers and your premium: how UM costs are priced into ratesWhere uninsured motorist claims show up in insurer data, how much UM coverage costs per car, why prices differ by state, and what the evidence does not show.How used-car prices and parts costs feed into your premiumUsed-car values and repair costs set what collision and comprehensive claims cost, and filed rates follow with a lag, so a price spike can reach you later.Hail, floods and hurricanes: how weather shows up in car premiumsWhy a comprehensive premium can rise on a car that was never damaged: how insurers price hail, flood and wind losses, spread them over years, and reinsure them.When do car insurance rates drop for young drivers?Young-driver rates fall in steps tied to years licensed, age bands and a clean record, not one birthday. The three clocks, plus a seven-year illustration.Where each premium dollar goes: claims, commissions and profitWhat an auto premium pays for, using NAIC 2024 figures: claims, adjusting costs, commissions, taxes and profit, with a worked example and the limits of ratios.Why big insurers spend billions on advertising and what you pay for itWhat Progressive, Allstate and GEICO reported spending on ads, where it sits in the expense ratio, and why it does not raise your premium dollar for dollar.Why teen drivers cost so much to insureWhy adding a teen can sharply raise a premium: crash rates per mile, how age and inexperience are priced, why boys and girls differ, and when the price falls.Why two insurers quote the same driver very different pricesEach insurer files its own base rates, weights and appetite with the state, so one driver gets two prices. A worked example and how to read a wide spread.Average expenditure vs average premium vs quoted rateWhy published car insurance averages disagree: how NAIC expenditure, average premium and quote-panel rates are built, and which one fits your situation.What households spend on car insurance: Consumer Expenditure SurveyHow the BLS Consumer Expenditure Survey measures vehicle insurance spending by income, age and region, and why it differs from NAIC averages.Why dense Northeast and Mid-Atlantic states cost more to insureHow traffic per road mile, theft, repair and injury costs, uninsured drivers and state rules help explain why DC, New York and New Jersey top 2023 price charts.Why Detroit and Philadelphia pay far more than their statesInsurers price by where a car is garaged. How territory rating works in Michigan and Pennsylvania, what the claims data show, and how California limits it.Do higher state minimum limits raise everyone's rates?A higher legal minimum mostly raises the price of minimum-limit policies. How the cost passes through, what recent increases show and what data cannot prove.Why Hawaii's car insurance market is a case of its ownHawaii's premiums sit below the national average despite island costs. How no-fault, prior approval, rating bans and a thin market shape that.Premium taxes, fees and assessments: how states add to your billWhy two drivers with the same coverage see different tax and fee lines: premium taxes, guaranty assessments, per-vehicle fees, and policy or installment fees.Limited tort vs full tort: what the choice saves in PA and NJPennsylvania and New Jersey let you trade part of your right to sue for a lower premium. What each state's option takes away, what it saves and how to decide.Massachusetts auto insurance: PIP, the Safe Driver Plan and 2008How Massachusetts mixes compulsory PIP, a $2,000 tort threshold, merit-rating points, a residual market and the 2008 move to managed competition.Massachusetts' switch from fixed rates to managed competitionMassachusetts stopped setting auto rates in April 2008. What it kept, what happened to prices and the residual market, and which effects are disputed.Michigan PIP: the fee schedule, attendant care limits and the MCCAHow Michigan PIP medical benefits are paid after the 2019 reform: coverage choices, the Medicare-based fee schedule, family attendant care limits, the MCCA.Profitability by line and state: what NAIC data says about marginsWhat the NAIC's profitability report shows about auto insurer margins, how auto compares with homeowners, and why one year of data misleads.New Jersey's car insurance market: reforms and rating rulesWhy New Jersey ranks among the costlier auto markets: the choice no-fault design, the shift out of assigned risk, the Special policy, rating limits and density.Do no-fault states really cost more? Comparing premiums by systemGrouped by fault system, no-fault states look pricier on average, but the gap rests on a few dense, high-cost places. The NAIC data and how to read it.North Carolina's rate bureau and Reinsurance Facility: a system apartHow the North Carolina Rate Bureau files one set of auto rates for the industry, how the Commissioner can contest them, and how the Reinsurance Facility works.Why northern New England sits near the bottom of the price chartsMaine, Vermont and New Hampshire rank among the cheaper states for car insurance. Each usual explanation, tested against NAIC and IRC data.Car insurance affordability by state: premium as a share of incomeLouisiana, not Florida, tops 2023 rankings once premiums are divided by income. How the ratio is built, what low-income data adds, and how to avoid misusing it.Prior approval vs file-and-use: do regulated states pay more or less?What the research and state data show about auto rate-filing regimes and prices, why the comparison is confounded, and how California and Texas contrast.Why your premium changes when you cross a state lineA state line changes required coverage, banned rating factors, rate review and fees, so neighbors pay different premiums. Here is how, and which address to use.Why comprehensive coverage costs so much more in some placesNAIC data show comprehensive premiums vary fourfold between states. Theft, hail, animals, glass laws and territory lines explain it, and what drivers control.Credibility in pricing: how insurers rate small groups and new modelsHow actuaries blend thin data with broader experience to price a new car model, a small territory or a new insurer, with worked numbers and the main criticism.Driver license laws for undocumented residents and uninsured drivingWhich states license drivers regardless of immigration status, what the research says about insured rates, hit-and-runs and premiums, and how coverage works.The Federal Insurance Office's study of auto insurance affordabilityWhat Treasury's 2017 affordability study measured, how it chose a 2% benchmark and ZIP-code unit, what it found in 845 ZIP codes, and what it could not say.Heavy, fast and quiet: do EVs raise injury and liability claims?Matched-pair HLDI data show electric cars with fewer injury and liability claims than gas twins, with gaps. What weight, speed and silence mean for your limits.How car theft statistics are counted: FBI, NICB and insurer dataWhy the FBI, NICB and insurance-claim theft figures disagree, what each one counts, and how to read a most-stolen list without being misled.How concentrated the auto insurance market is, nationally and by stateFour groups write about 59% of U.S. personal auto premiums, but state leaders differ. How the data is built, what the HHI means, and how to check your state.How to judge satisfaction surveys and online reviews of insurersWhat J.D. Power, Consumer Reports, ACSI and BBB scores really measure, who they leave out, why reviews skew, and how to weigh them against complaint data.How uninsured driver rates are estimated: IRC vs state countsWhy quoted uninsured rates disagree: claims-based estimates, state database counts, vehicles versus drivers, lapses, and how to read a figure before citing it.Insurance Information Institute statistics and how to use themThe III (Triple-I) is an insurer-funded information group whose auto tables mostly reprint NAIC, ISO and BLS data. How to trace, cite and cross-check them.Why doubling liability limits does not double the premiumInsurers price each liability layer by how often claims reach it, so higher limits cost far less than the protection they add. The math, with an example.Reading auto insurance studies by who paid for themA sponsor's stake shapes the question a study asks, not whether its arithmetic is right. A method for reading insurer, advocate, regulator and press studies.ZIP-code pricing and racial disparities: what investigations foundStudies from 2015 to 2024 found higher auto premiums in minority ZIP codes. What they show, what insurers and regulators answer, and what remains unproven.McCarran-Ferguson antitrust exemption: what insurers may do jointlyThe 1945 McCarran-Ferguson Act shields some joint insurer activity from federal antitrust law when states regulate it. What it covers, where it stops.NAIC market share reports: who writes auto insurance in your stateHow to read the NAIC's annual market share reports and state versions, including groups versus companies, premiums written and earned, and loss ratio columns.What NHTSA counts in the economic cost of motor vehicle crashesNHTSA put 2019 crash costs at $340 billion, or $1.37 trillion with quality of life. What the report counts, who pays, and why it is not a premium formula.Older driver crash statistics: myths, facts and insuranceWhat IIHS and NHTSA data show about older drivers per licensed driver, per mile and per crash, and how insurers use claims rather than headlines to price age.Premium refunds: when regulators order money back to driversHow the 2020 pandemic auto refunds came about, which regulators ordered them, what limits their power, and the other ways drivers get premium returned.How to read a Highway Loss Data Institute loss bulletinA practical guide to the relative claim frequency, severity and overall-loss scores in HLDI publications, what 100 means, and why they are not your premium.State-run auto insurance price comparison tools and shopper's guidesSome state insurance departments publish sample auto premiums by insurer. How those tables are built, what they omit, and how to check a quote against them.The small-numbers problem in insurer complaint ratiosWhy a complaint index of 3.0 can mean four complaints at a small insurer, why one year proves little, and how to read high, low and swinging ratios fairly.Verisk (ISO) advisory loss costs: the data behind many insurers' ratesHow ISO, part of Verisk, pools claims data into advisory loss costs, how insurers turn them into rates, and where regulators and antitrust law draw the line.Who goes uninsured and why: cost, lapses and enforcement gapsWhy 15.4% of motorists were uninsured in 2023: price against income, coverage gaps, weak enforcement, and what states have tried, with the evidence behind each.Why many insurtech car insurers struggled with lossesGrowth outran pricing knowledge, claim costs jumped after 2021, and marketing and reinsurance ate the margin. What dated filings show, and what to check.Why an old five-star crash rating is not today's five-starNHTSA and IIHS have toughened their crash tests several times. How to read a used car's old ratings, find the test version behind them, and compare across years100/300/100 vs 250/500/100: what the extra limits buyHow 250/500/100 compares with 100/300/100 on injury claims, multiple victims, property damage, price and umbrella rules, and how to decide for yourself.Learning to drive as an adult: how insurers price a first policyA first-time adult driver is priced on missing history, not teen risk: how no prior coverage, thin credit and inexperience are treated, and how long it lasts.When you can't afford car insurance: options before the policy lapsesA missed payment starts a cancellation clock, not an instant lapse. Here is the order to act in, what each fix costs, and what a lapse costs.Car insurance price myths: red cars, quote shopping and othersNine common price beliefs tested against regulator, federal and industry sources: car color, quote shopping, credit, full coverage, clean records and ads.Changing your deductible mid-policy: premium effects and claim timingMost insurers let you change a deductible mid-term, but the change applies from its effective date forward, never to a loss that already happened.Choosing liability limits for five different householdsFive fictional households, one method: what a judgment could reach, which limit tier fits, and when an umbrella policy is the cheaper way to add protection.Getting insured after years without a license or a carA long gap can make you look like a new driver. How license gaps and coverage gaps are rated, what to bring, and what to do if standard insurers decline.Lowering coverage midterm without creating a gapHow to cut coverage before renewal safely: request an endorsement, set the effective date, check lenders and state proof rules, and document the refund.How to prioritize coverage when your insurance budget is fixedA spending order for a fixed monthly insurance budget: what to buy first, where a higher deductible helps, what to cut, and which risks you accept by doing so.The judgment-proof myth: what cheap limits expose after a crashHaving little money does not make you immune to a judgment above your policy limit. Here is how excess judgments are collected and what the law protects.Lowering the bill for a household with several driversHow insurers assign drivers to cars, when to split policies, how students away at school are treated, and where saving money turns into misrepresentation.No-money-down car insurance: what the offer really meansZero-down car insurance ads rarely mean zero. Learn how down payments are set, where fees add up, what a bounced first payment does and how to compare totals.Policy fees, taxes and surcharges: reading the real cost of a policyWhy two quotes with the same premium can ask for different amounts, and how to add fees, state charges and discounts to compare the true cost of a policy term.Setting different collision and comprehensive deductibles on purposeWhy your comprehensive deductible need not match collision: claim size, premium, hail, deer and surcharges all argue for a split. Includes a worked example.Six-month vs twelve-month car insurance policiesA policy term rarely changes the price by itself. It changes when your rate can move, how often you can shop and how a cancellation refund is worked out.The price of liability limits: how much each step up really costsRaising liability limits costs far less than the extra protection suggests. A filed North Carolina factor table shows the curve, with a worked example.Too-cheap insurance ads on social media: what is behind themWhy a few dollars a month for car insurance usually means a data grab or a worthless policy, and how to check an advertiser against NAIC and state records.Very high deductibles ($2,500 to $5,000): who they suitA $2,500 to $5,000 deductible pays off for few drivers: those with a large premium, below-average claim risk and cash on hand. Here is the break-even test.When to drop collision and comprehensive on an older car: the mathA step-by-step test that sets collision and comprehensive premiums against what the car would actually pay out, with three worked examples at different values.Why your final price differs from the online quoteAn online quote is an estimate built on what you typed. Here is what insurers check afterward, when a higher price is legal, and how to dispute a wrong re-rate.