Whoa Nellie! Auto Insurers Reduce Insurance Rates

For the first time in four years, a majority of major auto insurers are cutting their rates. Auto insurance expenses will average $871 per vehicle in 2004, up $29-a 3.4% increase-over 2003, according to the Insurance Information Institute(III). Rates had increased 8.8% in 2002 and 7.8% in 2003.

“For the first time since 2000, you’re seeing major insurers cut their rates by a significant amount,” said Bob Hartwig, III chief economist in an article in the March 31 issue of the Wall Street Journal.

The article reports that State Farm has cut rates on such policies in 13 states earlier this year because of a drop in claims activity. USAA also announced rate reductions in 20 states earlier this year.

Insurers cite several reasons for the drop including an aging driving public (baby boomers between 40 and 60 now account for the largest driving group), less claims being filed and increased deductibles.