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Auto Insurance Information Institute - AUTO INSURANCE FACTS AND STATISTICS 
Auto Insurance
AVERAGE EXPENDITURES FOR AUTO INSURANCE,
UNITED STATES, 1993-2002


Year
Average Auto Insurance expenditure
Percent change
Year
Average expenditure
Percent change
1993$6373.1%1998$703-0.3%
19946512.21999683-2.8
19956682.620006870.6
19966913.420017204.8
1997705 2.020027747.5

Source: National Association of Insurance Commissioners. Reprinted with permission.  Further reprint or redistribution is strictly prohibited without written permission of NAIC.

AUTO INSURANCE EXPENDITURES, BY STATE

The following table shows estimated average expenditures for private passenger automobile insurance by state for 1998 to 2002, providing approximate measures of the relative cost of automobile insurance to consumers in each state. The National Association of Insurance Commissioners (NAIC) assumes that all insured vehicles carry liability coverage but not necessarily collision or comprehensive coverage.

The average expenditure measures what consumers actually spend for insurance on each vehicle. They do not equal the sum of liability, collision and comprehensive expenditures because not all policyholders purchase all three coverages. Expenditures are affected by the coverages purchased as well as other factors. In states where the economy is healthy, people are more likely to purchase new cars. Since new car owners are more likely to purchase physical damage coverages, these states will have a higher average expenditure. The NAIC notes that urban population, miles driven per number of highway miles, and per capita income have a significant impact on premiums. The 2004 report shows that high premium states tend to also be highly urban, with higher wage and price levels and greater traffic density. Tort liability and other auto laws, labor costs, liability coverage requirements, theft rates and other factors can also affect auto insurance prices.
  AVERAGE EXPENDITURES FOR AUTO INSURANCE BY STATE

 2002 Average Expenditure           
Liability    
Collision  
Comprehensive
Average Expenditure 
Rank (1) 
Average Expenditure
Rank (1)  Alabama$335.29$293.81$127.41$625.9540$605.3239 Alaska533.74358.48141.78883.5711826.1010 Arizona484.83302.73204.11877.1912822.3511 Arkansas360.18277.79168.29670.1232620.9033 California (2)452.70316.49111.28777.9320705.0122 Colorado554.55298.71198.11914.068807.5112 Connecticut599.59323.53134.45964.575912.195 Delaware605.05270.81115.05907.129850.568 District of Columbia (3)558.37405.16228.341,040.0231,011.763 Florida559.74261.73109.68870.3513788.0213 Georgia372.02348.96162.38739.1622703.0723 Hawaii496.26251.6692.08736.4323705.1021 Idaho320.09216.11132.93560.0548523.3848 Illinois381.62299.87120.27725.5125682.5925 Indiana356.70266.15118.70646.3835614.8634 Iowa283.46204.15150.94546.5449512.6649 Kansas281.99246.95209.42585.7145555.9044 Kentucky434.78260.14120.72685.1129645.2127 Louisiana544.24330.30190.00926.037838.969 Maine323.09238.08110.08584.6746546.0146 Maryland488.90291.13130.02837.3415783.7714 Massachusetts (4)623.73306.50132.15983.594936.014 Michigan375.16449.86161.69839.2514735.1218 Minnesota454.80238.57192.48800.4416735.2017 Mississippi363.90291.76164.44678.7531637.6230 Missouri360.32276.55139.35666.1633633.5232 Montana344.34225.81222.69627.8939572.0642 Nebraska304.36216.45191.99589.0943553.8345 Nevada563.59307.71139.89887.4610851.157 New Hampshire392.44277.63108.57730.6024685.6224 New Jersey  (3) (5)659.18420.36204.321,112.8611,027.711 New Mexico414.49275.90170.08699.3728662.2726 New York741.16321.74177.341,087.3821,014.962 North Carolina320.08260.50116.99587.6944564.7643 North Dakota243.32208.80231.84532.8151497.7951 Ohio371.52244.5197.64639.4337613.7535 Oklahoma359.72279.75169.57650.0034610.3337 Oregon430.89225.77108.71681.6530642.5228 Pennsylvania471.07278.28122.41783.3719726.4119 Rhode Island609.63354.25131.70937.186880.066 South Carolina409.52247.70160.80702.4426636.2631 South Dakota279.97209.48205.01540.4550510.4250 Tennessee338.82291.75117.10631.6438610.6536 Texas (6)446.40307.07128.27791.3917735.4616 Utah408.85270.74126.58700.0527640.1229 Vermont338.82273.37122.11644.1636602.5240 Virginia361.34238.88112.47625.3241610.1438 Washington491.98254.62132.50787.6218749.7415 West Virginia463.43281.06173.92776.2321706.9020 Wisconsin317.74218.06135.60609.4642573.4641 Wyoming292.74239.18212.58580.3247527.6347 Countrywide449.18292.67138.14773.68719.75

(1) Ranked by average expenditure.
(2) Preliminary.
(3) The District of Columbia and New Jersey are entirely urban and their results cannot be directly compared to states with rural areas.
(4) Data incorporates Safe Driver Plan credits and surcharges.
(5) Historically, New Jersey has paid 2 to 4 times the national average in dividends to policyholders, and at times as high as 6 times the national average, which reduces the average expenditure paid by New Jersey policyholders.
(6) Due to the absence of county mutuals which had 37 percent of the market in 2002, Texas results are not comparable to results from other states.

Note: Average Expenditure=Total premiums written/Liability Car-Years. A car-year is equal to 365 days of insured coverage for a single vehicle.

Source: Reprinted with permission from State Average Expenditures and Premiums for Personal Automobile Insurance in 2002, published by the National Association of Insurance Commissioners. Further reprint or redistribution strictly prohibited without written permission of NAIC.

AVERAGE EXPENDITURES FOR AUTO INSURANCE BY STATE, 1998-2002 (Cont'd)


 
 
 
 
 
Percent increase/decrease 

State
2000
1999
1998
1998 Rank (1)
2001-2002
1998-2002
Alabama593.65612.44632.25283.4%-1.0%
Alaska770.11750.66771.32127.014.6
Arizona791.99788.54817.6896.77.3
Arkansas606.05596.88589.06347.913.8
California (2)666.94665.65708.612110.39.8
Colorado754.88743.84763.731513.219.7
Connecticut871.20860.95900.6045.77.1
Delaware848.51861.41845.3266.67.3
District of Columbia (3)996.39986.491,031.3522.80.8
Florida746.29742.43770.551310.413.0
Georgia674.12672.11672.38245.19.9
Hawaii701.51699.99797.49114.4-7.7
Idaho505.16492.72493.54467.013.5
Illinois651.60646.03656.30256.310.5
Indiana570.27581.98583.22365.110.8
Iowa478.75466.19459.01506.619.1
Kansas540.21541.94532.16435.410.1
Kentucky615.69609.65617.34326.211.0
Louisiana806.01813.02830.30810.411.5
Maine528.08514.14492.05487.118.8
Maryland757.41756.63769.34146.88.8
Massachusetts (4)945.61889.24815.62105.120.6
Michigan701.80704.68736.711614.213.9
Minnesota695.55687.90679.64228.917.8
Mississippi654.16655.23650.14276.54.4
Missouri611.73605.11611.47335.28.9
Montana530.43511.17509.68459.823.2
Nebraska532.74523.25517.54446.413.8
Nevada829.28821.15842.6774.35.3
New Hampshire665.47649.79621.50306.617.6
New Jersey  (3) (5)977.071,015.001,138.2818.3-2.2
New Mexico674.27663.95675.95235.63.5
New York939.43930.05959.7637.113.3
North Carolina563.66566.85564.35394.14.1
North Dakota477.28468.79452.10517.017.9
Ohio579.05577.88581.47374.210.0
Oklahoma602.72576.22575.42386.513.0
Oregon625.37621.28629.87296.18.2
Pennsylvania698.56691.06721.93197.88.5
Rhode Island825.44823.89851.7956.510.0
South Carolina619.57593.32655.332610.47.2
South Dakota481.67484.08479.22495.912.8
Tennessee592.33582.26586.65353.47.7
Texas (6)677.83696.24730.66177.68.3
Utah620.05615.48618.88319.413.1
Vermont568.39555.76534.37426.920.5
Virginia576.08565.99563.74402.510.9
Washington722.48697.44710.00205.110.9
West Virginia680.09684.01724.58189.87.1
Wisconsin545.29545.29552.08416.310.4
Wyoming495.60490.54492.454710.017.8
Countrywide687.06683.70702.747.510.1

(1) Ranked by average expenditure.
(2) Preliminary.
(3) The District of Columbia and New Jersey are entirely urban and their results cannot be directly compared to states with rural areas.
(4) Data incorporates Safe Driver Plan credits and surcharges.
(5) Historically, New Jersey has paid 2 to 4 times the national average in dividends to policyholders, and at times as high as 6 times the national average, which reduces the average expenditure paid by New Jersey policyholders.
(6) Due to the absence of county mutuals which had 37 percent of the market in 2002, Texas results are not comparable to results from other states.

Note: Average Expenditure=Total premiums written/Liability Car-Years. A car-year is equal to 365 days of insured coverage for a single vehicle.

Source: Reprinted with permission from State Average Expenditures and Premiums for Personal Automobile Insurance in 2002, published by the National Association of Insurance Commissioners. Further reprint or redistribution strictly prohibited without written permission of NAIC.

WHERE THE PREMIUM DOLLAR GOES,
PRIVATE PASSENGER AUTO INSURANCE, 2002


PREMIUMS EARNED:

$100
CLAIMS:
Payments to injured persons:
Medical$10   
Wage loss and other economic payments2  
Pain and suffering and other noneconomic awards6  
Lawyers’ fees13  
Other costs of settling claims2  
    Subtotal $33  
Payments for damage to cars (1):
Property damage liability$19   
Collision claims18  
Comprehensive claims8  
Other costs of settling claims2  
     Subtotal $47  
Total claims$80
EXPENSES:
Commissions and other selling expenses$16   
General expenses (costs of company operations)5  
State premium taxes, licenses and fees2  
Dividends to policyholders1  
Total expenses$24
Claims and expense total$104
BOTTOM LINE:
Investment gain (2)  $6
Pretax income ($100 - $104 + $6)  2
Tax  1
Income after taxes$1

(1) Includes theft and damage to other property, e.g., road signs.
(2) Includes interest, dividends, and realized capital gains.

Source: Insurance Information Institute based on data from A.M. Best Company, Inc.; Insurance Services Office, Inc. (ISO); National Association of Insurance Commissioners; Insurance Research Council.

  • In 2002, claims accounted for $80 of every $100 earned in private passenger auto insurance premiums in the United States.

  • Lawyers’ fees accounted for $13 out of every $100 in premiums. Of this, half went to plaintiffs’ attorneys and the remainder to defendants’ attorneys.

  • Theft accounted for about 25 percent of the dollars that go to pay comprehensive claims, or 2 percent of premiums earned for private passenger auto insurance.

VEHICLES INSURED, BY STATE

All states and the District of Columbia use one of four systems to guarantee that auto insurance is available to those who cannot obtain it in the private market. All four systems are commonly known as assigned risk plans, although the term technically applies to only one type of plan. The assigned risk and other plans are known in the insurance industry as the shared or residual market. Policyholders in assigned risk plans are, as the name suggests, assigned to various insurance companies doing business in the state. Hence the term voluntary (regular) market, where auto insurers are free to select policyholders rather than have them assigned.

THE NONSTANDARD AUTOMOBILE INSURANCE MARKET

The percentage of vehicles insured in the shared market is dropping, in part because of the nonstandard market. The nonstandard market is a niche market for drivers who have a worse than average driving record or specialized cars such as high-powered sports cars, and custom-built cars. It is made up of small specialty companies, whose only business is the nonstandard market, and well-known auto insurance companies with nonstandard divisions. In 2002, some 385 individual insurance companies specialized in the nonstandard auto market. Most of these companies are part of major insurance organizations.

The nonstandard market evolved slowly over several decades. Up to the mid-1960s, most drivers who did not meet an insurance company’s “standard” or “preferred risk” underwriting criteria could only find coverage in the shared market where prices are generally much higher and insurers pool or share the profits and losses. With advancements in computer technology that made it easier to set appropriate prices for smaller and smaller risk categories, some insurers began to specialize in insuring drivers with marginally bad driving records. Then, in the 1970s and 1980s, when the passage of compulsory auto liability insurance laws in many states brought more poor drivers into the marketplace and expertise in nonstandard auto insurance underwriting had grown, more companies entered the business. By the late 1990s, the nonstandard market accounted for about one-fifth of the total.
PRIVATE PASSENGER CARS INSURED
IN THE SHARED AND VOLUNTARY MARKETS, 2002


State
Voluntary
Shared market
Total
Shared market as a percent of total
Alabama3,061,630 45 3,061,675 0.001%
Alaska349,642 1,355 350,997 0.386
Arizona3,202,265 283 3,202,548 0.009
Arkansas1,776,559 18 1,776,577 0.001
California20,180,885 55,224 20,236,109 0.273
Colorado3,159,462 13 3,159,475 0.000
Connecticut2,285,108 7,185 2,292,293 0.313
Delaware554,760 684 555,444 0.123
D.C.212,774 1,306 214,080 0.610
Florida9,616,320 36,400 (1)9,652,720 0.377
Georgia5,729,851 179 5,730,030 0.003
Hawaii690,128 9,314 699,442 1.332
Idaho965,480 58 965,538 0.006
Illinois7,178,572 3,462 7,182,034 0.048
Indiana4,105,522 34 4,105,556 0.001
Iowa2,198,271 67 2,198,338 0.003
Kansas2,171,112 1,549 2,172,661 0.071
Kentucky2,758,277 181 2,758,458 0.007
Louisiana2,525,286 453 2,525,739 0.018
Maine960,763 540 961,303 0.056
Maryland3,484,242 127,666 3,611,908 3.535
Massachusetts 3,832,007 302,423 4,134,430 7.315
Michigan6,598,343 32,342 6,630,685 0.488
Minnesota3,441,363 69 3,441,432 0.002
Mississippi1,648,381 612 1,648,993 0.037
Missouri3,862,079 418 3,862,497 0.011
Montana672,136 371 672,507 0.055
Nebraska1,338,850 101 1,338,951 0.008
Nevada1,366,117 76 1,366,193 0.006
New Hampshire848,737 3,685 852,422 0.432
New Jersey5,064,198 131,162 5,195,360 2.525
New Mexico1,177,305 267 1,177,572 0.023
New York8,719,331 487,931 9,207,262 5.299
North Carolina4,757,179 1,333,052 6,090,231 21.888
North Dakota532,597 16 532,613 0.003
Ohio7,804,530 8 7,804,538 0.000
Oklahoma2,420,270 542 2,420,812 0.022
Oregon2,435,530 69 2,435,599 0.003
Pennsylvania8,116,435 48,640 8,165,075 0.596
Rhode Island633,104 33,863 666,967 5.077
South Carolina2,824,757 3,687 2,828,444 0.130
South Dakota612,775 38 612,813 0.006
Tennessee3,779,206 574 3,779,780 0.015
Texas (2)(2)(2)(2)
Utah1,451,001 6 1,451,007 0.000
Vermont444,871 4,404 449,275 0.980
Virginia5,511,309 19,314 5,530,623 0.349
Washington3,981,314 15 3,981,329 0.000
West Virginia1,238,055 290 1,238,345 0.023
Wisconsin3,484,676 54 3,484,730 0.002
Wyoming432,890 7 432,897 0.002
Countrywide166,196,2552,650,052 168,846,307 1.570%
(1) Estimated.
(2) Shared and voluntary market data are not available for Texas.

Source: Automobile Insurance Plans Service Office.
  • In 2002 (latest data available), 169 million vehicles were insured in the United States, excluding Texas. Of that number, only 2.7 million, or 1.6 percent, were insured in the shared market. In 2001, 1.5 percent of all insured vehicles were in the shared market; in 1993, the figure was 4.1 percent.

  • The number of cars insured in the shared market in Florida fell from 69,747 in 2001 to 36,400 -- down 33,000 vehicles or 48 percent. In South Carolina, cars insured in the shared market fell from 31,734 to 3,687 vehicles -- down 28,000 vehicles or 88 percent.

  • States with significant increases in the number of vehicles in the shared market were New York, North Carolina and New Jersey. In New York, 73,785 more vehicles were insured in the shared market in 2002, compared to 2001, bringing the total to just under half a million cars and up 18 percent. In North Carolina, 61,198 more vehicles were in the shared market, which now totals 1.33 million. In New Jersey, there were 29,237 additional vehicles in the shared market, which now totals 131,000, up 28.7 percent from 2001.

  • According to an Insurance Research Council (IRC) study released in 2001, 14 percent of drivers in the United States were uninsured in the years 1995 to 1997 (calculated by using the ratio of claims of people who were injured in crashes with uninsured drivers to claims by those injured in crashes with insured drivers), or the ratio of uninsured motorist claims to bodily injury claims.

  • The ratio of uninsured motorists varies within each state. Uninsured motorist rates are much higher in cities than in rural areas.

  • The IRC’s Public Attitude Monitor (PAM) for 2001 found that 12 percent of respondents admitted having at least one uninsured car. However, the PAM report’s methodology differs from the claims study because the PAM is based on self-reporting, which the IRC says is not as accurate as studying insurance claims.

AVERAGE PAID CLAIM COSTS, LIABILITY INSURANCE,
PRIVATE PASSENGER CARS, 1993-2002 (1)


Year
Bodily injury
Property damage
1993$10,696$1,790
199410,2771,856
19959,9062,029
19969,6402,112
19979,5302,167
19989,5562,226
19999,5242,298
20009,6602,411
20019,8512,481
200210,1382,564

(1) For all limits combined and including all loss adjustment expenses. For bodily injury liability, dollar averages exclude Massachusetts and most states with no-fault automobile insurance laws for all years, and South Carolina for 1993. For property damage liability, dollar averages exclude Massachusetts, Michigan and New Jersey for all years, and South Carolina for 1993.

Source: Insurance Services Office, Inc. (ISO).

  • Bodily injury costs peaked at $10,696 per claim in 1993.

  • The downward trend ended in 2000, but bodily injury costs in 2002 were 5.2 percent lower than they were in 1993.

  • Property damage costs rose steadily throughout the last decade and were 43.2 percent higher in 2002 than they were in 1993.

AVERAGE PAID CLAIM COSTS, LIABILITY INSURANCE,
PRIVATE PASSENGER CARS, 1993-2002 (1)



(1) For all limits combined and including all loss adjustment expenses. For bodily injury liability, dollar averages exclude Massachusetts and most states with no-fault automobile insurance laws for all years, and South Carolina for 1993. For property damage liability, dollar averages exclude Massachusetts, Michigan, and New Jersey for all years, and South Carolina for 1993.

Source: Insurance Services Office, Inc. (ISO).

  • Recent increases in bodily injury claim costs reflect higher hospitalization, pharmaceutical and legal costs.

  • Higher vehicle repair costs, reflecting insurers’ reduced use of generic crash parts, is a factor in the increase in property damage claim costs.

COLLISION LOSSES

The following table shows the claim frequency, average loss payment, and average loss payment per insured vehicle year under collision coverage for recent model vehicles. The last item factors in both claim frequency and the average loss payment per claim. This combination is a measurement of both how often collision claims are filed and the magnitude of those claims.

The claim frequency is expressed as a rate per 100 insured vehicle years. A vehicle year is equal to 365 days of insurance coverage for a single vehicle.
COLLISION COVERAGE INSURANCE LOSSES IN YEARS SINCE INTRODUCTION,
2000-2002 MODEL YEAR PASSENGER VEHICLES


 
2000
2001
2002
Claim frequency per 100 insured vehicle years8.88.78.2
Average loss payment per claim$3,171$3,277$3,400
Average loss payment per insured vehicle year$279$286$278

Source: Highway Loss Data Institute.

AVERAGE ECONOMIC LOSS AND PROPORTION OF BODILY INJURY CLAIMANTS
EXPERIENCING SOME DEGREE OF DISABILITY OR A FATALITY, 1977-2002



(1) Excludes total disability and fatalities and claimants with no loss or missing data.

Source: Insurance Research Council.

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