W.Va. Auto Rates Rising

July 20, 2004

West Virginians paid more for auto insurance in 2001 than people in all but 15 other states, according to statistics from the National Association of Insurance Commissioners, the Associated Press and the Charleston Gazette reported.

The state moved from having the 20th highest rates to the 16th highest in 2001, the most recent statistics available.

Insurance Commissioner Jane Cline said state premium prices have risen since 2001, but national experts have predicted costs should begin to stabilize this year.

Full comprehensive insurance for a single automobile in the state averaged about $841 for 2001 compared to the national average of $705.

West Virginia’s rates were higher than all surrounding states except Maryland, where residents paid an average $853, the 14th most expensive in the nation in 2001.

Nationally, New Jersey had the highest auto insurance costs: $1,183 in 2001. The cheapest insurance available was in Iowa, the only state to have an average premium cost below $600.

A study by Cline’s office showed poor loss results and higher underwriting expenses were part of the reason for West Virginia’s higher rates. Loss results stemmed from state residents having more severe injuries than those elsewhere. Higher underwriting costs were attributed to the state’s premium tax, the study concludes.

General expenses compared to most states were identical, while commissions varied, the study said.

Cline said new laws enacted in the last legislative session should stabilize rates. For example, a fraud unit will help weed out bogus, or illegal, claims. West Virginia had been one of only 10 states without such a unit.

Lawmakers also lowered the state’s threshold for deciding what is legally defined as driving under the influence of alcohol. Lowering the blood alcohol rate from 0.1 to 0.08 is expected to reduce DUI-related deaths by 7 percent, which would translate to a $40 savings on each insurance policy, the state study estimates.

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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