InsWeb Corp. announced the updated results for its Auto Insurance Index based on fourth quarter 2002 data. The Index is designed to identify and track general pricing trends of personal auto insurance.
According to data from InsWeb, the index revealed that as a whole, prices for auto insurance nationwide in 2002 increased on average by approximately 11 percent over the prior year. For example, the average price quoted for a six-month auto insurance policy on InsWeb’s marketplace during 2002 was $1,350 compared to $1,200 during 2001. Based on this data, consumers could be paying as much as $150 more for six-month policies when compared to 2001.
Statistics from the U.S Department of Labor indicate that the after-tax income for the average American household in 2001 was approximately $45,000. “According to this data, the cost of auto insurance based on a six-month policy in 2002 accounted for approximately six percent of the average household’s income, a full percent increase over the prior year,” said Hussein Enan, chairman of InsWeb Corporation. “Auto insurance is a major expenditure for the average household. A few minutes spent researching alternatives can save most consumers several hundred dollars, and help them mitigate the effects of price inflation.”
For the fourth quarter of 2002, rates for auto insurance appeared to stabilize, exhibiting a pattern similar to the previous two quarters. The majority, or nearly 59 percent, of the roughly 1.3 million quotes viewed by consumers during the fourth quarter were for 6-month policies.
The nature and size of InsWeb’s online marketplace enables the company to collect a wealth of demographic and product-related characteristics that it believes may be beneficial as broad indicators of pricing and other trends for the auto insurance industry. The index is calculated from quotes viewed at InsWeb by consumers in all states (except those in New Jersey, Massachusetts and North Carolina) for both six-month policies and 12-month policies; it is a weighted average of the separate indices for six-month and 12-month policies, respectively.
In each of the 12 quarters analyzed to-date, the index has been based on at least 0.5 million quotes, with an average of 1.3 million quotes analyzed in each of the quarters of 2002. While the index itself will be calculated on a quarterly basis, the intention is to track and monitor pricing on an annual basis, with quarterly data providing potential early insight into pricing trends, subject to short-term geographic and demographic changes by both carriers and consumers at InsWeb. The information will also be posted on InsWeb’s site at http://www.insweb.com/about/auto-index.htm.
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