Auto Insurance Facts
If you are concerned about affording your auto insurance, you could consider moving to Eau Clair, Wisconsin. It is scored the lowest among United States cities in annual premium cost. Here are some other auto insurance facts.
There are some pretty interesting auto insurance facts out there floating around, but one of the most interesting is that the average cost declined 1.3% in 2005. It was the third time in the previous decade that cost had seen a yearly decline. This is encouraging in a country where auto insurance is not optional but a matter of law. It reflects the positive result of free competition between the major auto insurance companies that must offer excellent service, lower rates, and it sometimes seems funnier television commercials to capture your insurance dollar.
There is a wide range in the annual cost of auto insurance from State to State and even city to city. It is known by most that age, driving experience, and driving record can all impact your rates, but not everyone is aware that the driving habits of your neighbors is going to weigh in as well. New Jersey earns the distinction of being the State with the highest rates. North Dakota ranks the lowest. Among cities, Detroit is the highest. This is an alarming fact. Why would the people who make our autos be the most unsafe driving them. I guess working on an assembly line makes them seem more disposable to Detroiters than to the rest of us. Eau Claire, Wisconsin, ranked the lowest among major cities.
Although the law requires only liability insurance, a full 77% of insurance buyers opt for comprehensive coverage. Of course, auto loans will require this. 72% of policy holders opt for collision insurance as well. It would be interesting to see the percentage of auto insurance policies sold in a country where neither the law nor the loan companies insisted on them, but indications are they would still be popular and are considered as more important than even life insurance to many people.
Did you ever wonder about where your insurance dollar is going? Most people assume that it is lining the pockets of some rich guy somewhere, but a look at the facts shows the truth here. Of every $100 spent on premiums, $67 is paid out on claims. Another $26 dollars is spent on operating expenses, which do include those funny commercials. This leaves $7 of profit, but the insurance companies are wisely investing their funds while they are waiting to pay claims and earn another $7. This total of $14 of profit is taxed to the tune of about $5 which leaves $9 out of every $100 as profit.
The auto Insurance companies of the United States are not the bad guys in any way. They did not mandate the laws requiring basic liability nor do they force lending institutions to insist on insurance. They do not make excessive profits and their rates are regulated by the most American of methods which is stiff and honest competition. Like many other risk protection providers, they are reviled until they are needed and then they are blessed.