Improved Car Safety And Fewer Claims
Over the past two years, RBC auto insurance rates have been reduced in many states as improved car safety and fewer claims have cut costs. "A well-crafted auto choice measure can provide significant savings," Snyder said. "And as we have seen recently, when underlying costs are reduced, consumers reap the benefits of lower insurance rates from the competitive market."
Opponents of no-fault also have made accusations that federal auto choice proposals encourage people to drive dangerously, but Snyder sees no validity in this point. "This is based on the ridiculous assumption that people consciously determine what kind of insurance they have before they do stupid things on the highway. Not only does this defy common sense but it is simply untrue." No-fault Michigan, for example, has an auto accident fatality rate of 19.67 per 100,000 registered vehicles, while tort based Louisiana has 25.14, tort based Arizona has 38.69 and tort based Mississippi has 40.77. Further, nothing in the federal bills reduce legal or insurance premium penalties against those who cause accidents or violate traffic laws.
"In fact, the tort liability system with its built-in profit in minor injury cases called 'pain and suffering' has clearly been an incentive for causing accidents," Snyder added. "The profits in faking or causing accidents and injuries to recover subjective 'pain and suffering' is eliminated under good no-fault laws because all you get are your actual economic losses, unless the injury is very serious or caused by a drunk or drugged driver.
"Cost and competition could be improved in many states if auto insurance laws were reformed and if competition in auto insurance were encouraged through moderate deregulation, especially the elimination of price controls," Snyder said. "These two reforms alone would assure better benefits for injured accident victims, reduce costs, and provide more choice for customers."
The American Insurance Association is a trade association representing more than 300 major insurance companies which provide all lines of property and casualty insurance. AIA's headquarters is located in Washington, D.C. and the association has representatives in every state.
Rates have come down at least 5.5% in the last three years, saving drivers nearly $ 400 million in reduced premiums and rebates, the California Department of Insurance estimates. Insurance analysts suppose the declines to carry on as insurers fight harder for market share.
"It's a great time for consumers to shop and save some money," said Kenneth Adams, spokesman for the Western Insurance Information Service, an industry trade group.
Los Angeles resident Sarah Klein, 59, found that out when she shopped for coverage for her 2006 Honda Prelude. Her new policy with the RBC auto insurance costs $ 1,500 a year--$ 500 less than she paid Liberty Mutual Insurance last year, and even $ 300 less than the new rate Liberty had quoted her.
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