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National Study: Competitive Market Benefits State’s Auto Insurance Consumers


January 7, 2019

 National Study: Competitive Market Benefits State’s Auto Insurance Consumers

Harrisburg, PA – Insurance Commissioner Jessica Altman today announced a national study that shows 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 average from 2015 to 2016, the latest 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 moderate auto insurance costs and provide consumers with options.”

The just-released report shows Pennsylvania’s average premium in 2016 was $1,017, which is 4.2 percent below the national average of $1,062. In addition, premiums increased on average by 4.8 percent in Pennsylvania from 2015 to 2016, while the national average increase was 5.2 percent. Drivers here also had the second-lowest premium compared to the six states that border Pennsylvania, with the average premium being 14.8 percent lower than the $1,193 average of the six bordering states.

“With more than 200 companies writing auto insurance in Pennsylvania, there is considerable 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 having the 18th highest percentage of population living in metro areas, the 17th highest miles driven per mile of highway, and the 10th highest population density in the country. Pennsylvania has the fourth-lowest average premiums among the nation’s 10 most populous states.

Altman says the Wolf Administration has taken actions to prevent unfair premium hikes, including not permitting 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. 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,” 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. 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 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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