Posts Tagged premiums

Nation’s Lowest Auto Insurance Rates

Auto insurance rates

States with the Lowest Auto Insurance premiums

Do you feel like your auto insurance rates have gotten out of hand? Be thankful if you don’t live in Michigan, Oklahoma or Louisiana. Residents there pay more than $2,000/per year on average to insure each vehicle. Iowans may also complain about raising rates, but should take some comfort in knowing they pay the lowest auto insurance rates in the nation! According to the November 2017 newsletter for Independent Insurance agents of Iowa, Iowans pay on average $1,125/year for auto insurance. Premiums vary by zip code and are based on the loss (claims) experience of insurance companies in each zip code. Therefore rates can vary widely even within a state. For example people in Detroit zip codes will pay a lot more than those in Marquette, MI.

Iowa’s lack of large urban areas helps reduce traffic congestion and accidents. However lower crime rates (theft and vandalism) as well as relatively fewer weather-related losses also work in the state’s favor. On the other hand, Iowa was the fourth highest state for deer-vehicle collisions last year according to State Farm. Of course the car you drive, driving records, credit history and age and experience of the driver(s) are important insurance rating factors too.

Uninsured Motorists

Iowa also is the 12th best state for the lowest percentage of uninsured drivers at just 8.7%*. This is despite the fact that Iowa doesn’t have a compulsory insurance law. Iowa’s Financial and Safety Responsibility act requires that drivers have the financial means to cover injury or property damage to others. Financial responsibility can be satisfied either from one’s personal wealth or with auto liability insurance.

The top 10 states with the lowest average auto insurance premiums are ranked below, with Iowa being the lowest:

  1. Iowa
  2. North Carolina
  3. Ohio
  4. New Hampshire
  5. Maine
  6. Idaho
  7. Wisconsin
  8. Kansas
  9. North Dakota
  10. Arizona

* Percentage of uninsured drivers, as measured by the ratio of uninsured motorists claims to bodily injury claim frequencies. Source: Insurance Research Council, 2015.

Get a quote from a Cedar Rapids auto insurance agency.

 

Posted in: Industry News, Iowa News

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Where are the best Auto Insurance rates in Cedar Rapids?

Where are the best Auto Insurance rates in Cedar Rapids?

Everyone knows that car insurance rates can vary by driver and vehicle as well as risk factors like driving record, vehicle use and mileage. But did you know that you can pay different rates depending on what part of Cedar Rapids you live?

Recently, a customer moved from one Cedar Rapids zip code to another. With no other changes, their auto insurance rate increased by $100 over the 6-month term. I thought it was unusual for such a large difference within Cedar Rapids and was curious how much your zip code affects your auto insurance rates. Using the same customer, I checked rates in each zip code in the metro area and here are the results:
 

auto-rates-by-zip

 
 
 
 
 
 
 
 
 
 
 
 

 Note: an index of 1.02 means this zip code is 2% more than the 52402 zip. This example was checked on Progressive. Each carrier sets their rating factors with approval from the Iowa Insurance Division who regulates insurance rates in the state of Iowa. Therefore, it’s important to note other carriers will not have the same rate differentials for the same zip codes.

In this example, the driver would pay $231 more in the SE Cedar Rapids zip code versus the NE zip code. I would’ve expected a large rate differential when moving to another state, as Iowa on average has some of the lowest auto insurance rates in the nation.

Why do auto insurance rates vary by location?

Insurers keep claims data by zip code. Those areas with higher rates of losses (insurance claims) will pay more than those with lower rates of loss. A higher number of accidents can lead to increased liability and collision coverage rates. Similarly, more losses from storms, deer strikes, vandalism or theft can lead to paying higher premiums for comprehensive coverage. For example Oklahoma has more severe wind and hail storms than Iowa does. Therefore you’ll pay more there for comprehensive coverage, which covers such loses, than in Iowa due to the increased risk.

It surprised me how much just moving across town, or in some cases just across the street, can affect your auto premiums!

 

Posted in: Cedar Rapids News, Insurance Tips

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