By Max Dorfman, Analysis Author, Triple-I
Georgia’s private auto insurance coverage affordability has considerably worsened over the previous decade and a half, making it one of many least inexpensive states, in keeping with a brand new report by the Insurance coverage Analysis Council (IRC) – a division of The Institutes, like Triple-I.
The research, Private Auto Insurance coverage Affordability in Georgia, ranks the state 47th when it comes to auto insurance coverage affordability. Solely 4 different states – Louisiana, Florida, Mississippi, and New York – are much less inexpensive. In 2006, Georgia was the 27th most inexpensive state.
Private auto insurance coverage expenditures in Georgia accounted for 2 p.c of the median family revenue in 2022 (the newest 12 months for which expenditure knowledge is offered). That is in contrast with 1.5 p.c nationally.
Key findings:
- From the mid-2000s by means of 2014, Georgians spent about the identical on auto insurance coverage as different People. Within the mid-2010s, nonetheless, auto insurance coverage expenditures in Georgia started escalating. Between 2014 and 2022, auto insurance coverage spending in Georgia grew 5.6 p.c annualized, in contrast with 3.3 p.c within the nation total and sooner than in every other state. In 2022, Georgia’s common expenditure of $1,347 was 20 p.c increased than the U.S. common.
- Affordability points in Georgia’s auto insurance coverage market stem from a number of components — a lot of which have been confronted by the remainder of the nation — together with financial inflation, rising alternative prices, dangerous driving habits, and authorized system abuse. Nevertheless, a number of key price drivers are increased in Georgia, together with propensity to file damage claims, variety of underinsured motorists, and declare litigation.
- Auto insurance coverage litigation is a rising concern in Georgia, particularly as tort reform in neighboring states could also be pushing legislation corporations in these states to hunt alternatives elsewhere. Georgia has skilled elevated lawyer promoting charges, notably in tv promoting.
“Uninsured and underinsured motorists are each a symptom and a reason for affordability points,” mentioned Dale Porfilio, FCAS, MAAA, president of the IRC. “When affordability deteriorates, whether or not from rising prices or slower revenue progress, rising numbers of motorists might select to decrease the coverage limits or to forgo the mandated insurance coverage fully.”
Porfilio, who can be Chief Insurance coverage Officer of Triple-I, famous that the ensuing want for drivers to buy uninsured motorist (UM) and underinsured motorist (UIM) safety additional will increase common insurance coverage expenditures.
“Each the UM and UIM charges are increased than common in Georgia,” he mentioned. “The UIM fee is very excessive within the state: Georgia’s UIM fee has been rising steadily and was the third-highest fee within the nation in 2022.”