NAIC Reports that Average US Auto Premium Rates Drop Nearly 3 Percent in 2007 from Prior Year

New data released in December 2009 from The National Association of Insurance Commissioners (NAIC) shows that the average U.S. auto premium rates fell by nearly 3 percent in 2007 from the prior year, with drivers in Washington, D.C. paying the most for car insurance.

The 2006/2007 Auto Insurance Database Report, which provides the average costs associated with personal automobile insurance nationwide, features state-by-state auto insurance data designed to provide needed information and analysis to insurance regulators, consumers and policymakers.

The data used for this report includes written premium and exposure data from calendar years 2003-2007 for the combined voluntary and residual market. The report also includes earned premium and exposure data, along with incurred loss and claims data (separately), from calendar/accident years 2004-2006 for voluntary and residual market business.

For each state, average premium and expenditures, pure premium, loss ratio, claim frequency and claim severity are calculated by coverage. The types of auto insurance coverage included are bodily injury and property damage liability (including no-fault), uninsured and underinsured motorist, medical payment, collision and comprehensive.

The NAIC recognizes the differences in state requirements for insurance coverage, limits and benefits. Many factors affect a state's expenditures and premiums, including underwriting costs, driving locations, accident rates, traffic density, auto theft statistics, repair costs and state laws.

Washington, D.C. topped the report with the largest average insurance costs in 2007 at $1,139.82. It was followed by New Jersey at $1,103.53. The numbers, according to the NAIC, assume that all insured vehicles possess liability coverage but do not necessarily carry collision or comprehensive or both.

While both Washington, D.C. and New Jersey had high rates, both witnessed a decline in their costs from the prior year.

Washington, D.C. drivers' costs fell 2 percent, or $23.78, while New Jersey drivers' saw costs decline 4 percent, or $48.08.

Across the country, auto insurance costs fell $21.24, from $816.22 in 2006 to $794.98 in 2007.

The least expensive place to reside was North Dakota, where insurance costs averaged $511.79, a decrease of a more than 3 percent, or $18.34.

North Dakota was followed by Iowa at $517.62; South Dakota at $533.65; Nebraska at $554.04; and Idaho at $564.

On the other end of the spectrum, Louisiana came in at $1,095.97; New York at $1,047.24; and Florida at $1,042.74. Costs in Rhode Island and Delaware also topped $1,000.