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Car insurance rates falling
Recent cuts make this a good time to comparison shop
Wednesday, December 27, 2006
Even in normal years, it's a good idea to
check your auto insurance occasionally with an eye on seeking discounts and fine-tuning your coverage. This year, it's especially wise. Some carriers have been cutting prices.
The buyer's market has developed for coverage in Arizona and several other states, thanks to tough competition, lower claim expenses and other factors that will help many drivers stretch their insurance dollars.
Specialty insurer USAA, which caters to military personnel and their families, has slashed its Arizona vehicle premiums an average 15 percent this year. advertisement
Meanwhile, heavyweight State Farm Mutual Automobile Insurance, the largest carrier in Arizona, today will announce an average 8.6 percent premium cut, taking effect next Tuesday.
The company estimates the move will save $41 million annually for Arizona motorists, one of six of whom is insured by State Farm.
After the cut becomes official, State Farm's premiums will be
nearly 20 percent lower on average than they were a decade ago.
Insurance officials say several factors have contributed to the favorable pricing trend.
At the most basic level, damage, theft and injury claims remain within expected ranges.
"We're seeing fewer, less- severe crashes resulting in fewer, less-severe damage and injuries," said LuWanna Nielsen, a State Farm spokeswoman in Tempe.
At the beginning of the year, the Insurance Information Institute had predicted that auto premiums nationally would rise just 0.5 percent in 2006, the smallest increase in six years.
"It's a good reason to shop around if you haven't already," said Erin Klug, a spokeswoman for the Arizona Department of Insurance.
Not only are people driving more prudently, insurers say, but safety features such as air bags have become standard equipment. High fuel prices also have played a role by encouraging motorists to switch to small, inexpensive cars that also tend to be less costly to fix.
Even the Internet has helped. Much of the double- digit premium cuts announced by USAA - the largest in the company's history - were made possible by customers utilizing the firm's Web site more often for routine inquiries and transactions.
"This allows our employees to support members when they have more complex financial-services needs," said Roger Wildermuth, a USAA spokesman in Sacramento.
In addition, competition has become more intense in Arizona, paving the way for more fruitful comparison shopping. Currently, 141 insurers are seeking new auto-insurance business in Arizona, up from 113 a year ago, Klug said.
The Department of Insurance periodically tracks insurance premiums statewide. The survey (www.id.state.az.us/ autopremium.html) underscores the wisdom of shopping around since premiums vary considerably.
Insurers also point to the continued use of credit scoring as a positive. Arizona and most other states allow insurers to check consumer credit scores when prospective customers apply for coverage.
"Insurance scores are highly accurate predictors of future loss, allowing insurers to more accurately price insurance and create a more fair and equitable rating environment for all drivers," Robert Hartwig, chief economist at the Insurance Information Institute, said in a statement.
Source: www.azcentral.com
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