Auto insurance coverage affordability in Georgia a rising concern, IRC says

Georgia has skilled a major decline within the affordability of non-public auto insurance coverage over the previous decade and a half, in keeping with a latest report from the Insurance coverage Analysis Council (IRC).

The report, titled “Private Auto Insurance coverage Affordability in Georgia,” highlights the state’s growing insurance coverage expenditures relative to median family revenue.

In 2022, private auto insurance coverage expenditures in Georgia accounted for two% of the median family revenue, in comparison with 1.5% nationally. This positioned Georgia forty seventh within the nation for auto insurance coverage affordability, with solely Louisiana, Florida, Mississippi, and New York rating decrease.

The state’s place has deteriorated considerably since 2006, when Georgia was the twenty seventh most inexpensive state.

The report signifies that from the mid-2000s by means of 2014, Georgians spent roughly the identical quantity on auto insurance coverage because the nationwide common. Nevertheless, starting within the mid-2010s, auto insurance coverage expenditures in Georgia started to rise extra quickly.

Between 2014 and 2022, spending on auto insurance coverage within the state grew at an annualized charge of 5.6%, in comparison with 3.3% nationally, and sooner than in another state. In 2022, the common expenditure in Georgia was $1,347, which was 20% larger than the US common.

Affordability challenges in Georgia’s auto insurance coverage market are linked to a number of components, together with financial inflation, excessive substitute prices, poor driving conduct, and authorized system abuse.

The report notes that Georgia experiences larger ranges of sure value drivers, such because the propensity to file harm claims after an accident, the prevalence of underinsured motorists, and the frequency of declare litigation.

Litigation associated to auto insurance coverage claims has change into a rising concern in Georgia, with the report suggesting that tort reform in neighboring states could also be pushing authorized corporations to hunt alternatives in Georgia, contributing to elevated legal professional promoting charges, significantly on tv.

Dale Porfilio, president of the IRC and chief insurance coverage officer on the Insurance coverage Data Institute (Triple-I), commented on the influence of uninsured and underinsured motorists on affordability.

He famous that as affordability deteriorates because of rising prices or slower revenue development, extra motorists might select to decrease their coverage limits or forgo mandated insurance coverage solely. This pattern will increase the necessity for drivers to buy uninsured (UM) and underinsured motorist (UIM) safety, which additional raises common insurance coverage expenditures.

Porfilio highlighted that each UM and UIM charges are larger than the nationwide common in Georgia, with the state’s UIM charge being significantly elevated. In 2022, Georgia had the third-highest UIM charge within the nation, and this charge has been steadily growing over time.

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