Consumers in most states are better able to afford personal auto insurance than they were 15 years ago, according to a new report from the Insurance Research Council.
For all income groups, including those earning low to moderate income, there is a marked degree of improvement in insurance affordability since the early 2000s. Currently, just about 1.5% to 1.6% of income is spent on auto insurance by the average consumer in the US – “much lower” than figures seen in previous decades, the IRC says.
The improvement is also widespread. All but five states saw auto insurance become more affordable since the 1990s, and all but four have shown improvement between the 2000s and the present.
Auto insurance is most affordable in North Dakota, where it represents 1.03% of income, followed closely by Iowa (1.05%), New Hampshire (1.06%), Virginia (1.07%) and Wyoming. On the opposite end of the spectrum, consumers in Louisiana pay more for insurance (2.85%) of income, as do residents of Florida (2.45%), New York (2.42%), Delaware (2.18%) and Michigan (2.10%).
“There is a lot of interest in the affordability of auto insurance on the part of consumers, policymakers and regulators,” said IRC Senior Vice President Elizabeth Sprinkel. “This report adds to the discussion, showing that auto insurance is becoming more and more affordable.”
Researchers with the study, titled “Trends in Auto Insurance Affordability,” reached their conclusions by calculating an expenditure-to-income ratio based on expenditure information from the National Association of Insurance Commissioners and the Bureau of Labor Statistics Consumer Expenditure Survey.
Learn more about the most expensive states for auto insurance in this article.
