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Car Insurance Rates Continue To Rise

By Abbey Wagner, InsWeb, January 2004
auto insurance quote

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 theft.

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 insurance.

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