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National Study Shows Pennsylvania Auto Insurance Consumers Benefit from Competitive Market with Premiums Below U.S. Average

01/10/2018

Harrisburg, PA - Acting Insurance Commissioner Jessica Altman today announced a national study indicating Pennsylvania auto insurance consumers continue to benefit from the state’s competitive market, with average premiums remaining below the national average, and rising less than the U.S. average from 2011 through 2015, the period the report covers.

“Governor Wolf’s top priority for the Insurance Department is consumer protection, and making sure Pennsylvanians can get the coverage they need at a price they can afford,” Altman said.  “This report from the National Association of Insurance Commissioners (NAIC) shows our efforts to maintain a competitive market are helping hold down auto insurance costs, and provide consumers with options.”

The just-released report shows Pennsylvania’s average premium in 2015 was $971, which is 3.8 percent below the national average of $1,009. In addition, premiums increased on average by 7.30 percent in Pennsylvania over the four-year period, while the national average increase was 11.11 percent. Drivers here also had the second-lowest premium compared to the six states that border Pennsylvania, with the average premium being 15.8 percent lower than the $1,152 average of the six bordering states.

“We have more than 200 companies writing auto insurance in Pennsylvania, so all Pennsylvanians do have access to a competitive market,” Altman said. “When companies compete for business, it is a good deal for consumers.”

Pennsylvania’s average auto premiums remain below the national average despite the state’s having the 18th highest percentage of population living in metro areas, the 17th highest miles driven per mile of highway, and the 9th highest population density in the country.

Altman says the Wolf Administration has taken actions to prevent unfair premium hikes. These include making clear the so-called “widow’s penalty,” where a surviving spouse’s premium is increased solely because the person is now a widow or widower, is not permitted. The administration has also issued a notice to insurers it will not approve rate filings that include a practice known in the industry as “price optimization.” This is a practice in which sophisticated pricing tools are used to charge different premiums to policyholders who present essentially the same risk to the insurer, with the price differences based on whether or not a particular policyholder is likely to shop around for coverage.

 The NAIC report notes that states have different auto insurance laws, such as how much coverage drivers must carry, and whether options such as limited tort, which restricts drivers’ ability to sue for damages in certain instances, are available, and these differences impact premiums. 

 “Governor Wolf and I will always come down on the side of consumers, and this report shows we are continuing to provide drivers with affordable options when it comes to auto insurance,” Altman said.  “I encourage consumers to shop around and find the coverage that best meets their needs for the best price.”

Information on auto insurance is available at www.insurance.pa.gov on the Auto page.  Consumers can also get questions answered or file complaints online or by calling the Consumer Services Bureau at 1-877-881-6388.

MEDIA CONTACT: Ron Ruman - 717-787-3289

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