Get ready for higher auto insurance bills this year.
In its annual report on auto insurance rates, the Insurance Information Institute (III) projects auto premiums will rise an average of 9 percent in 2003.
“The cost of auto injury claims is rising by as much as 30 percent in some states.”
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Dr.
Robert Hartwig, Vice President and Chief Economist for the III, says
rising medical costs are a major reason auto insurance premiums are
going up. “Each year there are more than two million car accidents
involving injuries. Several people are often injured in the same
accident. Typical costs for treating an auto accident victim range from
$6,000 to $9,000 but can easily run into the tens of thousands of
dollars. The cost of auto injury claims is rising by as much as 30
percent in some states,” Hartwig points out.
Hartwig
says the $15 billion to $20 billion auto insurers pay in medical claims
each year are a very significant component of auto insurance costs.
“Higher costs for hospitalization and pharmaceuticals, state
regulations permitting a wide range of dubious treatments and
associated legal costs are largely to blame,” Hartwig claims.
Other reasons Hartwig cites for rising auto insurance premiums include:
- Higher repair costs
- Larger jury awards in traffic accident lawsuits
- Growing fraud
Fraud,
such as the use of substandard parts by repair shops, is a major target
of insurance companies. "We are determined to take the profit out of
fraud. It is unfair for honest individuals to pay for the actions of a
few dishonest people,” says Doug Ashbridge, Director of Special
Investigations at Farmers. “We are committed to fighting fraud
and controlling the cost of insurance for our customers.”
Hartwig says there’s a good chance you can save money on your car insurance, if you follow some simple guidelines:
Take advantage of every discount you are eligible for.
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Take
advantage of every discount you are eligible for. Insurance companies
offer many discounts, including for good drivers, good students, loyal
customers and people who insure multiple cars or their home and
vehicles with the same company.
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You can receive discounts, if your car is equipped with certain safety equipment and anti-theft devices.
- Take
a defensive driving class. Some insurers will reduce your rates,
as a reward for learning techniques that could prevent traffic
accidents.
- Raise your deductible.
- Maintain
good credit. Many insurance companies will charge you less, if
your credit history suggests you will pay your insurance bill regularly
and on time.
It’s also a good idea to talk
with your agent or insurance company, to find out what suggestions they
might have for keeping your auto insurance as affordable as possible
“Because
each company has had slightly different experiences with drivers and
accidents, prices will vary from company to company. So if you’re
buying or leasing a new car, shop around for auto insurance,” says Toby
Alfred, manager of the web site for Progressive Casualty Insurance.
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