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Non-Tech : HMN -- A poor man's GEICO? -- Ignore unavailable to you. Want to Upgrade?

To: Duker who wrote (25)	5/4/1999 10:50:00 AM
From: Duker	Read Replies (1) \| Respond to of 72

Auto Insurance Rates Decline; Insurer Competition, More Skilled Drivers and Safer Vehicles Key, I.I.I. Reports NEW YORK, May 4 /PRNewswire/ -- Automobile insurance rates fell by 2.8% in 1998, the first decline since 1973. Among the factors driving the deceleration include competition between insurers, more skilled drivers on the road, safer vehicles, diminished tolerance for driving under the influence, falling car prices and anti-fraud efforts on the part of insurers and states, according to the Insurance Information Institute. Auto insurance rates are expected to fall an additional 4.5% in 1999, and motorists with good driving records may see even bigger savings. But auto insurance expenditure, which measures what consumers actually spend for insurance on each vehicle, continues to rise, although at a slower pace than in previous years. Average auto insurance expenditure rose by an estimated 0.5% in 1998 compared with 2.1% in 1997. ''The increase in auto insurance expenditure is due to record new car sales,'' said Dr. Robert P. Hartwig, vice president and chief economist I.I.I. ''New cars are more expensive than old ones and so is the insurance. Moreover, new cars have loans or are leased and require full comprehensive and collision coverage. These coverages may have been dropped on older vehicles.'' Hartwig added that expenditures on automobile insurance are affected by many factors besides rate changes, including driving record, price trends for new and used vehicles, eligibility for discounts, consumer automobile purchasing trends (e.g., cars vs. SUVs), and consumer choice of elective coverages (e.g., collision, comprehensive). According to Hartwig, the typical two-car family in the suburbs is probably paying more for auto insurance than they were a few years ago because more than likely they purchased a new car during that period. ''In addition, expensive SUVs and trucks are accounting for an ever higher share of vehicle sales -- nearly 50% today vs. 32% in 1987.'' Hartwig noted that aggressive competition between insurers may push the average expenditure for auto insurance down by 1% this year, despite continued strong demand for new cars and trucks. Other factors affecting auto insurance prices include traffic density, tort liability laws, medical costs and auto collision repairs. The Insurance Information Institute is a fact-finding, communications organization sponsored by the property/casualty industry. To learn more about saving money on insurance or to see if you are carrying the right coverages on your automobile, home or business, visit the I.I.I.'s web site at www.iii.org. INSURANCE INFORMATION INSTITUTE Year Expenditure Change(%) 90 $574 NA 91 $596 3.8% 92 $618 3.7% 93 $637 3.2% 94 $651 2.1% 95 $668 2.7% 96 $691 3.4% 97 $706 2.1% 98* $709 0.5% 99* $702 -1.0% Source: I.I.I. calculations based on data from the National Association of Insurance Commissioners and the U.S. Bureau of Labor Statistics. Factors Driving the Deceleration in Auto Insurance Expenditures -- Competition between insurers -- Baby boomer population aging. Tend to be involved in fewer accidents as they age. -- Relatively fewer teenage drivers -- Anti-fraud efforts on the part of insurers and states -- Safer vehicles -- Diminished tolerance for driving under the influence -- Declining average price of new cars * I.I.I. estimates. SOURCE: Insurance Information Institute