AUTO INSURANCE PREMIUMS

	Where Does Your Auto Insurance Premium Dollar Go?
	Factors Influencing Auto Insurance Rates
	Some Ways To Help Control Your Auto Insurance Costs

Where Does Your Auto Insurance Premium Dollar Go?

In 2002 (latest figures available), claims accounted for $80.00 of every $100.00 earned in private passenger auto insurance in the United States, according to the most recent figures from the Ohio Insurance Institute.

Company Expenses -- commissions, state taxes, general expenses -- accounted for $24 of every $100 earned. Investments added $6 to income. The bottom line worked out to $1.00 after-tax profit for every $100.00 in premiums. Here's how it works out:

The $1.00 profit on $100.00 of premium translates into a 1% rate of return.

Private Passenger Automobile claims payments, on the average, break down as follows:

These are average figures for 2002 private passenger auto business for the entire industry. Figures will vary from state to state, and company to company, depending on their individual losses, investment income, and operating expenses.

Factors Influencing Auto Insurance Rates

Auto insurance rates are affected by many factors that insurance companies cannot control. These include the frequency and severity of traffic crashes, repair costs, medical and hospital costs, wage levels and the size of court judgments.

• Auto insurance pays the wages of people who are disabled, for weeks up to months, because of injuries suffered in auto crashes.
• Auto insurance pays garages and body shops to repair damaged autos. Garage and body shop rates continue to rise.
• Auto insurance companies pay hospital and medical expenses of crash victims. Hospital and medical costs are also on the increase.

• Consider higher deductibles on your collision and comprehensive coverage. The higher your deductible, the lower your premium.
• If you buy a new car, consider a family car rather than a high performance model -- particulary if you have a youthful driver in the family.
• Drive carefully. Driving records have a major impact on auto insurance rates. Be a defensive driver. At-fault accidents or violations can increase your rates or place you in a higher-risk category.
• If possible, reduce daily driving. Consider car-pooling or mass transit to cut down on your drive to work mileage.

Some Ways To Help Control Your Auto Insurance Costs

There are ways to help control your auto insurance costs without sacrificing your auto insurance needs. Here are some ideas to consider:

• Increase your deductibles. If you assume a small part of the risk by increasing your deductible, you can lower your premiums.

• Choose the type of car you drive carefully. If you are considering buying a new car, check with your agent how the rate for the car you want compares with other models. Premiums are often higher for most luxury and sport model cars because of higher accident repair costs, high performance engines or auto theft experience.

• Reduce your daily driving. Statistics show that the further you drive, the more likely you are to be involved in an accident - and the more you'll pay for insurance. Consider other means of transportation to work such as car-pooling or mass transit to cut down on your drive-to-work mileage.

• Become a defensive driver. One at-fault accident or violation can increase your rates or place you in a higher-risk category.

• Be aware of how and where you park. Often, the cost of vandalism and auto theft is overlooked and these factors drive up the costs of auto insurance for everyone.