With the year 2003 in the history books, auto insurance prices
looked to have continued their upward trend during the year, and
are expected to increase throughout 2004.
Consumers at InsWeb, and consumers shopping for auto insurance
in general, continue to see their premiums increase. During the
period of the first quarter of 2000 (when InsWeb began tracking
pricing data) through the second quarter of 2003, prices increased
54 percent (according to the InsWeb Car Insurance Index).
After nearly a decade of only modest price increases, auto insurance
prices started trending sharply upward in 2000.
Reasons for the increases include rising claims costs driven primarily
by medical costs, significantly higher vehicle repair costs, rising
jury awards, insurance fraud and abuse, as well as increasing auto
According to data from the InsWeb Car Insurance Index, as a whole,
prices for auto insurance nationwide in 2002 increased by approximately
11 percent over the prior year. For example, the average price quoted
for a six-month auto insurance policy on InsWeb's marketplace during
2002 was $1,350 compared to $1,200 during 2001. And experts at the
Insurance Information Institute (III) project that prices rose by
approximately 8.5 percent in 2003.
Just because it is a new year does not mean consumers can expect
prices to level out or decrease. However, the percentage by which
prices increase may start to decline a bit. The III speculates auto
insurance rates will rise by about 6 percent in 2004, as opposed
to the 8.5 percent projection in 2003 and 11 percent increase (according
to the InsWeb Index) in 2002.
What Can Consumers Do?
"The Index suggests that prices continue to rise, and that
consumers could save hundreds of dollars by shopping for their insurance
online," said Hussein Enan, chairman of InsWeb. "For example,
a recent internal analysis showed that consumers presented with
five or more quotes at InsWeb saw a quote that was on average more
than $500 lower than consumers presented with only three quotes.
This difference increased the more quotes consumers saw and demonstrates
the benefits of evaluating multiple carrier offerings."
Mr. Enan also says, "Auto insurance is a major expenditure
for the average household. A few minutes spent researching alternatives
can save most consumers several hundred dollars, and help them mitigate
the effects of price inflation."
So what can consumers do? Shop Around! Compare free quotes at a
marketplace like InsWeb, and start saving yourself some money!
You can start here to shop for online auto