Quotes given to customers during the second quarter increased an average of 3.4% when compared with the first quarter 2008 -- when auto rates began to rise for the first time in a year, said Insurance.com in its quarterly Car Insurance Rate Report.
"Car insurance companies are continuing to raise prices due to rising medical costs and the rising cost of repairing vehicles," said Dave Roush, chief executive officer of Insurance.com. "We believe rates will continue to increase through 2009."
Insurers reported high severity numbers due to these rising medical and repair costs during the first quarter 2008. The factor offset speculation that auto rates could decrease as people drive less due to rising gas prices. Brian Sullivan, editor and publisher of Auto Insurance Report, said gas prices were more likely to stabilize rates rather than reduce them.
According to Insurance.com, the most expensive quotes given this quarter from the 48 states surveyed belonged to Louisiana at $2,577; New Jersey at $2,544; and Washington, D.C. at $2,466.
However, rate quotes decreased for Louisiana and Washington, D.C. when compared with last quarter. The Louisiana Senate recently made changes to a bill that would require motorists to purchase additional minimum liability coverag. At the start of this year, New Jersey approved a new territorial rating map for private-passenger auto insurance for the first time in about 50 years. The New Jersey Automobile Insurance Competition Act was signed into law in 2003. Before the act, drivers had difficulty finding an insurance company due to an availability crisis.
The largest rate increase quarter-to-quarter was in Indiana. Rate quotes here jumped 6.7% to $1,501, which put the state just outside the top 10 least expensive states for auto rates. Indiana was followed by Arkansas, where rates quotes rose 6.1% to $1,834; Rhode Island, where rate quotes increased 5% to $2,286; and Texas, where rate quotes increased 4.3% to $1,853.
The least expensive state for rate quotes were Ohio ($1,268), Wisconsin ($1,276), Maine ($1,285), Iowa ($1,326) and Idaho ($1,381).
In 2007, the top five writers of private-passenger auto in the United States, according to A.M. Best Co state/line product information based on direct premiums written, were: State Farm Group with a 17.5% market share; Allstate Insurance Group, with 11.3%; Progressive Insurance Group, with 7.3%; Berkshire Hathaway Insurance Group, with 7.2%; and Farmers Insurance Group, with 5.5%.