It’s general knowledge for Georgia residents that the Peach State has been paying more and more each year for car insurance. In fact, Georgia has had the not so distinct “honor” of being the #1 state in auto insurance rate increases more than once in the past decade. According to an analysis by S&P Global Market Intelligence, Georgia led the nation with the highest increase in personal auto insurance rates in 2016. They’ve also felt the pain of ranking either first or second nationally for increases in the three previous years. No one wants such honorable mention, least of all the pocketbooks of hard-working Georgians who foot the bill! The good news, Georgians are told, is that the increases are trending down a bit; they’re no longer in the double-digit increase range. It makes one almost afraid to open their car insurance mail. Feels like it’s so out of hand. As Norm on the 1986 TV show “Cheers” said: "It's a dog eat dog world, Sammy, and I'm wearing Milk-Bone® underwear."
There are numerous reasons car insurance rates have been going up in many areas of the country, including Georgia. A few include:
§ Cars are more expensive and more expensive to repair/replace than they used to be, especially with all the included safety features
§ Number of drivers driving without insurance/an increase of ‘hit and run’ incidents
§ Insurance fraud
§ Rising medical costs impact Bodily Injury claims
§ Insurance scores
§ A litigious society
§ Distracted driving
The above list isn’t exhaustive. And, it stands to reason that more expensive cars are more expensive to repair. It used to be that replacing a bumper meant changing out a bumper or a windshield was a windshield. Now there are cameras and sensors involved that need to be considered and calibrated which also increases labor costs. Plus, growing populations mean more people on the streets and highways (so do better gas prices). More people driving more expensive cars on more congested roadways with more distracted drivers all add up to higher payouts when an incident does occur. Other things like major storms impact driving and create potential collision and comprehensive claims (we’ve had a lot of those this past decade). Add to this that more people drive without car insurance; so the problem gets worse due to uninsured motorist claims and the rates get even higher. The maddening thing is, all of this impacts all the good drivers who’ve had no accidents or tickets.
Georgia has a big additional reason for these major rate increases. In 2008, an insurance rates legislation bill, Senate Bill 276, was passed. The Georgia Insurance Commissioner serving at the time, John W. Oxendine, expressed his “profound disappointment” as it passed both bodies of the Georgia General Assembly. Before it passed, he was quoted in insurancejournal.com*:
“Today the trial lawyers and big insurance companies are laughing all the way to the bank at the expense of Georgia consumers,” Oxendine said. “If allowed to become law, this legislation can only result in higher auto insurance premiums for Georgia drivers.”
Sadly, for Georgians, he was proven correct. This major factor plus all the others adds up to ever increasing rates making it even more important to know what coverage you need and want.
So what is a driver to do? Here are some thoughts:
- Shop your rates or work with an agent that does this for their clients automatically
- Paid in Full is the cheapest way to pay (avoids billing fees & often has a nice discount)
- EFT/ACH (automatic payments from checking) is often the next best (typically has lower billing fees & a discount)
- Some companies will also do an automatic payment from a Visa or MasterCard at a slightly higher rate or the same as EFT/ACH
- Work on improving your credit score
- Raise deductibles (you’re accepting more of the risk which costs less, but find out how much less because sometimes it is not worth it)
- Consider used cars or ones on which you can get liability (not full coverage)
- Pay attention and avoid potential incidents with distracted drivers, speeders, swerving drivers and the like
- Look for discounts that you’re missing
- Try “Telematics” (driving trackers) if your company offers it and won’t increase your rate based on it
It’s a crazy world out there these days. Many states are seeing car insurance rates higher than ever before. Be vigilant and protect yourself as much as possible. Review your coverage with your agent. Don’t assume that because a company has been the best before that it will always be the best.
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