Auto Insurance Expenditures Grow 6.9% from 2009 to 2013

Auto Insurance Expenditures Grow 6.9% from 2009 to 2013

Spending on car insurance is on the rise across the country according to an NAIC report from 2009-2013. We looked at the numbers and synthesized some trends for you.

The National Association of Insurance Commissioners (NAIC) recently released the latest data on auto insurance expenditures in the U.S. for 2009 through 2013. Expenditures increased on average 6.94% nationally between 2013 from 2009. The total expenditures reported are based on the total premiums written by insurers for liability, collision, and comprehensive coverage divided by the number of insured cars for their year of coverage.

States with the Greatest Reported Increases and Decreases

We found that between the four years, Michigan had the highest annual expenditure growth of 24%. North Dakota and Massachusetts ranked with the second and third overall growth rates in the same time period. On the other hand, Hawaii's average expenditure actually dropped 6% in the same time period. There were five other states that registered small drops from 2009 to 2013.

Michigan generally has higher than average auto insurance costs. A major cause is its no-fault law, which is a part of the minimum requirements in the Great Lake State. It's a generous protection that allows insured motorists to claim almost unlimited amount of medical bills under Personal Injury Protection coverage for injuries from car accidents, until the injuries are completely healed or no rehabilitation is needed. However, it translates into higher rates for consumers to pay.

Other than inflation, individual states may see different rates of increase for reasons such as higher numbers of accidents and claims, or even natural disasters, that result in different amounts of losses experienced by insurance companies in each state. Costs also differ on an indiviudal policy level, as drivers will see premiums increase for a number of reasons: accidents, changes in the type of coverage, limit increases, or lowered deductibles, etc.

2013 vs. 2009 Growth by State

The numbers in the table below reflect the average expenditure (total amount of premiums paid per year of insurance coverage for insured cars) by state. We also show the 2013 vs. 2009 growth in expenditure numbers by state, and have organized states from the highest increase to the lowest:

STATE201320122011201020092013 vs. 2009

Michigan

$1,131$1,049$984$955$91323.88%

North Dakota

60557655052951018.61%

Massachusetts

1,00897794289186017.14%

New Jersey

1,2541,2201,1861,1571,10113.94%

Florida

1,1441,1281,0911,0371,00613.68%

South Dakota

58155753852551213.37%

Oklahoma

76874071670367813.36%

New York

1,1821,1531,1111,0791,05811.73%

Nebraska

63961760259357511.04%

Tennessee

70467465064163411.03%

Kentucky

77376074572369910.58%

Rhode Island

1,0661,0351,00498596910.03%

Oregon

7837427247247238.38%

Delaware

1,1011,0651,0481,0311,0217.80%

Iowa

5725615525475317.76%

South Carolina

7947727487387387.68%

Virginia

7196926806746687.67%

Minnesota

7457196966936927.58%

Kansas

6696326266256227.52%

Arkansas

7036796656626576.99%

Ohio

6596356206196166.98%

Connecticut

1,0119879699659526.19%

Georgia

8017687547497556.09%

Maryland

9799669569489295.42%

West Virginia

8598478348308155.38%

Missouri

7046846756786685.38%

District of Columbia

1,1871,1551,1391,1341,1285.30%

Wisconsin

6215996006135915.17%

Colorado

7787387247307414.92%

Louisiana

1,1461,1131,1111,1211,1004.20%

Mississippi

7687487407457384.12%

Texas

8958598438488604.07%

Pennsylvania

8418288138128113.73%

Montana

6796586556576563.50%

California

7837487417467563.50%

Alabama

6746596536516523.29%

Wyoming

6406246206216242.50%

North Carolina

6256116006006102.45%

Illinois

7457327277337282.33%

Utah

7347137137177172.27%

New Hampshire

7337177067067182.15%

Vermont

6566436346306461.53%

Washington

8388108068158271.42%

New Mexico

7236956927047180.65%

Indiana

6226376216246200.23%

Idaho

553535535548555-0.26%

Alaska

889873873890897-0.83%

Maine

593583577582598-0.84%

Nevada

936906905930944-0.87%

Arizona

811782777805842-3.65%

Hawaii

739735748766786-5.99%

Source: NAIC 2016 Auto Insurance Report

Mark is a Senior Research Analyst for ValuePenguin focusing on the insurance industry, primarily auto insurance. He previously worked in financial risk management at State Street Corporation.

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