Georgia's Rate Increases are Making Auto Insurance Unaffordable

While some aspects of car ownership have become cheaper, auto insurance prices have jumped 22% nationally since 2011. In Georgia, rates have spiked 54% in the same time--the highest in the nation and twice as fast as fast as the U.S. average. Income growth in the state has not kept pace, and has made auto insurance much more unaffordable for the 3.6 million Georgians who require a car to travel to work.

Rate Increases are Outpacing Wage Growth in Georgia

Incomes are going up, but auto insurance has become less affordable. As we discuss more below, premiums have increased 54% since 2011 compared to only 12% for median income in the same time statewide. The Department of the Treasury states that if premiums exceed 2% of annual income, then insurance is unaffordable. By those standards, 88 of the 159 counties in Georgia could not afford their auto insurance premiums in 2011 based on the state average reported by the Insurance Information Institute. In the last five years however, it has shifted so now an incredible 142 of the 159 counties cannot afford their auto premiums.

Graph shows how insurance groups have raised auto insurance rates in Georgia since 2011

Counties in southern Georgia historically report lower median incomes, but now even most northern counties are faced with unaffordable auto insurance premiums in 2017. The only counties that still have affordable auto premiums are the Atlanta counties of Fulton, Forsyth and Cherokee, and a few more on the extremities of the state.

Johnson County is the only county in the entire state where auto insurance has become "more affordable", and even then marginally so. Average premiums constituted 2.92% of income in 2011 and are now 2.91% of income - leaving insurance as still unaffordable.

In every other county auto insurance has become more expensive. In Stewart County for example, auto insurance took on average 2.5% of a person's salary to more than twice the share: 5.2%, making auto insurance in the county one of the least affordable in Georgia.

RankCountyAuto Insurance/Median Income 2011Auto Insurance/Median Income 2017
1Clay3.00%5.30%
2Stewart2.50%5.20%
3Taliaferro2.80%4.50%
4Calhoun2.60%4.40%
5Jefferson2.60%4.20%
6Dooly2.30%4.10%
7Randolph2.80%4.10%
8Hancock2.90%4.10%
9Wheeler2.50%3.90%
10Telfair2.70%3.90%
11Mitchell2.30%3.80%
12Decatur2.40%3.80%
13Warren2.40%3.80%
14Clinch2.50%3.80%
15Turner2.50%3.80%
16Jenkins2.80%3.80%
17Macon2.80%3.70%
18Brooks2.30%3.60%
19Clarke2.30%3.60%
20Toombs2.40%3.60%
21Wilcox2.40%3.60%
22Quitman2.50%3.60%
23Candler2.50%3.60%
24Atkinson2.50%3.60%
25Twiggs2.20%3.50%
26Dougherty2.20%3.50%
27Sumter2.30%3.50%
28Berrien2.30%3.50%
29Colquitt2.40%3.50%
30Burke2.40%3.50%
31Terrell2.50%3.50%
32Taylor2.80%3.50%
33Baldwin1.90%3.40%
34Laurens2.00%3.40%
35Grady2.20%3.40%
36Chattooga2.30%3.40%
37Webster2.30%3.40%
38Wilkes2.40%3.40%
39Miller2.40%3.40%
40Ben Hill2.60%3.40%
41Emanuel2.70%3.40%
42Bleckley2.00%3.30%
43Ware2.20%3.30%
44Upson2.30%3.30%
45Cook2.40%3.30%
46Murray1.90%3.20%
47Worth2.00%3.20%
48Rabun2.00%3.20%
49Thomas2.00%3.20%
50Montgomery2.10%3.20%
51Pulaski2.20%3.20%
52Bulloch2.20%3.20%
53Tattnall2.20%3.20%
54Irwin2.20%3.20%
55Coffee2.20%3.20%
56Screven2.20%3.20%
57Dodge2.40%3.20%
58Early2.60%3.20%
59Bibb2.00%3.10%
60Tift2.00%3.10%
61Richmond2.10%3.10%
62Fannin2.10%3.10%
63Lanier2.20%3.10%
64Talbot2.40%3.10%
65Crisp2.60%3.10%
66Meriwether2.00%3.00%
67Lincoln2.10%3.00%
68Franklin2.10%3.00%
69Washington2.30%3.00%
70Seminole2.40%3.00%
71Elbert2.40%3.00%
72Echols2.50%3.00%
73Wayne2.00%2.90%
74Towns2.00%2.90%
75Brantley2.10%2.90%
76Appling2.20%2.90%
77Johnson2.90%2.90%
78White1.80%2.80%
79Spalding1.80%2.80%
80Lowndes1.90%2.80%
81Union1.90%2.80%
82Gilmer2.00%2.80%
83Walker2.00%2.80%
84Schley2.00%2.80%
85Polk2.00%2.80%
86Hart2.00%2.80%
87Mcduffie2.10%2.80%
88Wilkinson2.10%2.80%
89Marion2.20%2.80%
90Bacon2.50%2.80%
91Jeff Davis2.50%2.80%
92Clayton1.70%2.70%
93Liberty1.80%2.70%
94Habersham1.80%2.70%
95Lamar1.80%2.70%
96Troup1.90%2.70%
97Stephens2.30%2.70%
98Evans2.50%2.70%
99Treutlen2.60%2.70%
100Jasper1.70%2.60%
101Lumpkin1.70%2.60%
102Carroll1.70%2.60%
103Whitfield1.80%2.60%
104Gordon1.80%2.60%
105Crawford1.80%2.60%
106Floyd1.90%2.60%
107Greene1.90%2.60%
108Peach1.90%2.60%
109Charlton2.30%2.60%
110Baker2.30%2.60%
111Banks1.70%2.50%
112Muscogee1.80%2.50%
113Madison1.80%2.50%
114Heard1.90%2.50%
115Haralson2.00%2.50%
116Pierce2.20%2.50%
117Glascock2.30%2.50%
118Rockdale1.30%2.40%
119Chattahoochee1.60%2.40%
120Glynn1.60%2.40%
121Putnam1.80%2.40%
122Monroe1.50%2.30%
123Newton1.50%2.30%
124Butts1.60%2.30%
125Chatham1.70%2.30%
126Dade1.90%2.30%
127Mcintosh2.10%2.30%
128Houston1.50%2.20%
129Walton1.50%2.20%
130Barrow1.60%2.20%
131Pickens1.60%2.20%
132Oglethorpe1.80%2.20%
133Long1.90%2.20%
134De Kalb1.40%2.10%
135Douglas1.40%2.10%
136Hall1.50%2.10%
137Jones1.60%2.10%
138Bartow1.60%2.10%
139Morgan1.60%2.10%
140Camden1.60%2.10%
141Catoosa1.70%2.10%
142Jackson1.60%2.00%
143Henry1.20%1.90%
144Fulton1.30%1.90%
145Dawson1.40%1.90%
146Pike1.40%1.90%
147Gwinnett1.20%1.80%
148Coweta1.30%1.80%
149Lee1.30%1.80%
150Cobb1.10%1.70%
151Columbia1.20%1.70%
152Paulding1.30%1.70%
153Bryan1.20%1.70%
154Effingham1.40%1.70%
155Cherokee1.20%1.60%
156Harris1.20%1.60%
157Oconee1.10%1.50%
158Fayette1.00%1.40%
159Forsyth0.90%1.30%

An Overview of Georgia Auto Rate Increases

Amongst the 11 insurance groups that account for 82% of the Georgian market share, rates have increased by an average 54% since 2011. Nationwide has imposed the most steep hikes, more than doubling rates since 2011. Even the state's Farm Bureau, which generally does not raise rates in other states, even had greater than 20% increase over the past five years.
Graph shows how insurance groups have raised auto insurance rates in Georgia since 2011
Map shows how states compared for auto insurance rate hikes since 2011

As we mention above, the rate increases in Georgia are the steepest in the nation. After Michigan, the next nearest state is nearby Florida who has raised rates statewide by 37%. The south in general has seen the highest increases in the country.

What's Causing Georgia's Rate Hikes?

Auto insurance companies raise rates when profits start to decline. Insurers lose money when they need to payout a claim, and in the last half decade, claims have gotten pricier and more frequent. As it pertains to Georgia, there are only three states where insurers have lost more money in the last five years relative the amount of premiums they wrote in the state.

In Georgia, insurers have only earned about 13% more than they have lost compared to a state by state average of 21%. We found states with the highest degree of losses strongly correlates with the steepness of auto insurance rate hikes in that state. You can see our findings in the table below.

RankStateWritten Premiums ($B) (2012 to 2016)Losses ($B) (2012 to 2016)Combined Loss RatioAuto Insurance Rate Hike Since 2011
1Georgia$32.0$27.987%54%
2Michigan$38.3$43.6114%47%
3Colorado$17.0$15.189%37%
4Florida$75.5$60.780%37%
5Nevada$9.3$7.985%34%
6Kentucky$12.8$10.481%33%
7Oregon$11.6$8.977%33%
8Arizona$19.1$15.179%31%
9South Carolina$15.0$12.684%30%
10New York$57.9$47.582%30%
11Louisiana$18.1$16.189%29%
12Rhode Island$3.8$3.181%29%
13Texas$82.1$67.782%28%
14Utah$7.5$6.080%28%
15Alabama$13.2$10.680%27%
16Missouri$16.1$12.879%26%
17Pennsylvania$38.2$30.379%26%
18New Mexico$5.9$4.677%25%
19Illinois$31.8$24.577%25%
20Wisconsin$13.4$10.377%25%
21Washington$21.2$16.979%25%
22Nebraska$5.2$4.280%23%
23Maryland$21.0$16.478%23%
24Virginia$23.6$17.976%22%
25Mississippi$8.0$6.481%21%
26Tennessee$16.9$12.976%21%
27Kansas$8.0$6.075%21%
28Connecticut$13.0$10.279%21%
29New Jersey$34.8$27.178%21%
30South Dakota$2.3$2.086%20%
31Oklahoma$11.5$8.977%19%
32Arkansas$8.1$6.479%19%
33Ohio$28.7$21.475%19%
34Indiana$15.7$12.177%18%
35Minnesota$15.6$11.674%18%
36Delaware$3.7$2.978%17%
37Idaho$3.8$2.875%16%
38Iowa$7.5$5.675%15%
39Massachusetts$22.4$17.578%15%
40California$109.9$88.080%14%
41New Hampshire$3.7$2.672%14%
42Montana$3.0$2.479%13%
43Maine$3.1$2.372%11%
44North Dakota$2.1$1.572%10%
45Vermont$1.7$1.273%9%
46West Virginia$5.9$4.271%6%
47North Carolina$24.9$19.377%4%
48Alaska$2.2$1.569%3%
49Hawaii$3.3$2.267%2%
50Wyoming$1.8$1.374%0%

Within Georgia, the companies with the largest hikes were often the ones with the greatest losses. Nationwide, which has nearly doubled rates from 2011, has a five year combined loss ratio of 106%, the highest in the state. Farmers, who has risen rates by 65% since 2011 also had an above average loss ratio of 93%.

Methodology

To find the rate increase in Georgia and the rest of the states we went to RateFilings.com who tracks every approved rate hike for the major insurance groups in each state. To find the loss ratio data of the companies, we turned to SNL Financial's Insurance Statutory Financials screener app.

We determined a county's average auto insurance premium by taking the average auto insurance premium in the state of Georgia in 2011 as reported by the Insurance Information Institute and then multiplying it by the average rate hike each year. We then divided that value by the the median income for each county, which we also obtained from SNL Financial's Demographic Intelligence Screener app. We then used the 2% affordability benchmark set by the Department of the Treasury to determine which counties have on average unaffordable auto insurance premiums.

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