5 states where car insurance rates are rising fastest
By Chris Kissell
Have your car insurance rates gone up in the past year? Chances are good the answer is “yes.” Rates rose by an average of 2.5 percent nationwide in 2013.
Last year, no state saw auto rates decrease, and only one state — North Dakota — saw rates hold steady, according to a survey by Perr&Knight, a leading provider of insurance consulting services.
Which states are seeing the biggest increases? Following are the top five risers for auto insurance — and tips for cutting your costs wherever you live.
5 states where car insurance rates are increasing fastest
5. Nevada: 4.1 percent
Everybody dreams of striking it rich in Nevada, where gambling is legal and Las Vegas — colorfully known as “Sin City” — attracts nearly 40 million hopeful visitors annually, according to the Las Vegas Convention and Visitors Authority.
The Silver State takes fifth place in the Perr&Knight survey, with auto rates increasing 4.1 percent in 2013.
Tip to save: Study hard
Few things make your car insurance more expensive than adding a teen to your coverage.
“Young drivers are expensive to insure because of their risk,” says Lori Conarton, spokeswoman for the Insurance Institute of Michigan.
In fact, adding a teen to your policy could boost your rates by as much as 100 percent, according to the Insurance Information Institute. A study commissioned by insuranceQuotes.com found that parents who added a teen driver to their car insurance saw premium increases that averaged from 18.1 percent in Hawaii to 116.3 percent in Arkansas.
While you cannot eliminate that cost, you can reduce it by insisting your teen gets good grades. Insurers often offer premium discounts to students who have a grade point average of a B or higher.
4. Delaware: 4.3 percent
Delaware’s nickname is the First State, because it was the initial colony to ratify the U.S. Constitution on Dec. 7, 1787.
Fortunately for Delaware’s residents, it’s not first in the nation for insurance rate increases. But it still ties with New York, with a 4.3 percent rise in auto rates in 2013.
Tip to save: Review coverage annually
As your life changes, so do insurance needs. Reviewing your coverage regularly can help you uncover ways to save, says Brian Levy, personal auto product manager at Liberty Mutual Insurance.
For example, people with new cars generally carry collision coverage (reimburses for damage to your own car after an accident with a car or other object) and comprehensive coverage (reimburses for damage from things like fire, hail and collisions with animals).
Those needs may change as a car ages.
“Coverage … could potentially be reduced based on the value of the vehicle,” Levy says.
3. New York: 4.3 percent
New York does everything bigger and better. It has the nation’s tallest skyscrapers and the best arts and culture scene. It is also America’s financial powerhouse.
So, it should be no surprise the Empire State also is near the top of the rankings in insurance costs. Car insurance rates rose 4.3 percent in 2013.
Tip to save: Drive carefully
One of the best ways to save is to simply be more cautious on the roadways. However, it is often the “least appreciated” way to cut costs, says Luis Sahagun, Farmers Insurance director of media relations.
“Getting a ticket or being responsible for an accident really does have a significant impact on the rates a driver will pay for insurance,” he says.
Drivers who remain accident-free and ticket-free are rewarded each time they pay their premium.
2. Georgia: 5.2 percent
Georgia is the heartbeat of the South. The state’s biggest city, Atlanta, is the hub of Southern business and culture. And Hartsfield-Jackson Atlanta International Airport is the world’s busiest.
Of course, not everything is sweet in the Peach State. Auto rates rose 5.2 percent in 2013, placing Georgia second in the nation for rate increases.
Tip to save: Look for group affiliation discounts
If you are a member of certain groups or organizations, you may get a break on premiums, says Tully Lehman, spokesman for the Insurance Information Network of California.
Many organizations reach agreements with specific insurance companies to provide coverage to members of the organization.
Discounts may be available to members of alumni associations, technical associations, credit unions or other organizations, such as AARP.
“Typically, it’s at a lower rate than an individual could get on their own,” Lehman says.
Members of associations affiliated with certain professions — such as those in the military, police officers, firefighters, and physicians and lawyers — also may be eligible to save by purchasing insurance from specific companies.
1. Michigan: 8.6 percent
Many things are on the upswing in Michigan. Hopes are growing in Detroit, where the auto industry is back on track.
However, one rise is not so appreciated in the Wolverine State: Michigan recorded the fastest-growing auto rates in the nation last year, clocking in at 8.6 percent for car insurance.
Tip to save: Buy a car that is safe, not flashy
When people buy cars, they consider many things — like price, looks and gas mileage.
But they often overlook one other crucial factor, says Carole Walker, executive director of the Rocky Mountain Insurance Information Association.
“When you’re shopping for a car, understand that you’re also shopping for insurance,” Walker says.
Car insurance premiums are based in part on the cost to repair the car, its overall safety record and its history of being stolen. Car models that score well in these categories cost less to insure.
Shoppers who talk to their insurance agent before visiting the car lot may make a wiser decision when buying.
See how much you could save today on your car insurance. Get your free auto insurance quotes today!