Continued Car Insurance Rate Increases Reflect Related Costs
As a driver, you undoubtedly know that having car insurance is critical - it can also be costly.
Because auto insurance rates reflect the costs of several expected expenses, continuing rate increases can best be attributed to numerous factors, including medical and legal costs, accidents, theft, fraud, drunk driving, auto repairs
and even insurance company expenses.
- Medical Expenses - Each year, there are more than two million car accidents involving car injuries. Typical costs for treating an auto accident victim range from $6,000 to $9,000, but can easily run into the tens of thousands. This, paired with the fact that the cost of auto injury claims is rising by as much as 30% in some states, translates into higher insurance premiums for everyone.
- Legal Expenses - Also, the average jury award for vehicular liability cases continues to rise, putting additionally upward pressure on auto insurance rates. The average jury award in auto liability cases recently rose 44%, from $187,000 in 1994 to $269,000 in 2000.
- Accidents - Car accidents remain the leading cause of death among Americans 1-34 years of age. According to the U.S. Department of Transportation, this these deaths cost our society more than $150 billion each year. Also to be factored in here additional factors is include the projected cost of alcohol abuse, high-speed driving, lack of seatbelt use and other bad driver behaviors.
- Theft - There were more than 1.2 million estimated motor vehicle thefts occurred in 2001, a 5.7% increase over the 2000 number of car thefts. Motor vehicles were stolen at a rate of nearly 370 per 100,000 inhabitants during 2001; trucks and buses were stolen at a rate of 86.5 per 100,000 persons, according to the U.S. Department of Justice Federal Bureau of Investigation.
Based on the 1.2 million estimated motor vehicles stolen in 2001 these statistics, the estimated dollar value of vehicles stolen vehicular theft nationwide was almost $8.2 billion.
- Fraud - As the number two crime in America, (tax evasion is number one), fraud costs an estimated $30 billion annually, according to the National Insurance Crime Bureau.
The most common fraud schemes involve insurance, and include bodily injury fraud, auto repair fraud, homeowners claim fraud, and workers compensation fraud.
- Drunk Driving - Impaired driving will affect one in three Americans during their lifetime, according to the National Center for Injury Prevention and Control. Alcohol-related motor crashes kill someone in the United States every 32 minutes and non-fatally injure someone every two minutes.
During 2001, 16,653 people in the U.S. died in alcohol-related motor vehicle crashes, representing 40% of all traffic-related deaths.
- Auto Repairs - Auto damageability has increased with advances in technology, construction and design - such as lighter, smaller vehicles, thinner glass and unibody construction. Consequently, this increases automobile repair costs.
- Insurance Company Expenses - Inflation continues to affect the delivery of insurance, servicing policyholders, and settling claims, further increasing the cost of automobile insurance rates.
|
