What’s Contributing To Oklahoma’s High Auto Insurance Rates?
Violent weather and a high incidence of uninsured motorists are two reasons Oklahoma ranks among the five most expensive states for car insurance, according to a California marketing and media company.
Oklahoma has the fifth-highest annual premium ($1,778) in the country, according to insure.com's annual rankings of the most and least expensive states for auto insurance.
"Living in tornado alley doesn't help you guys - not at all," said Penny Gusner, consumer analyst for insure.com, said in a telephone interview. "Hailstorms, tornadoes, windstorms those lead to a lot of claims that insurers end up paying out."
For the third consecutive year, Michigan is the most expensive state for car insurance, with an average rate annual premium of $2,738, more than double the national average of $1,325. The state of Montana is second, followed New Jersey and Louisiana.
"There is no catastrophic weather that we are immune from," AAA spokesman Chuck Mai said. "Even hurricanes in the Gulf make their impact on the state."
The top five least expensive states to insure for 2016 are Maine, with an average annual policy price of $808, followed by Ohio, Wisconsin, Idaho and New Hampshire.
Helping land Oklahoma on the most expensive list were a high number of uninsured motorists and a "good number" of Oklahomans with low credit scores, Gusner said.
The state's percentage of uninsured drivers (25.9) is the highest in the country, according to the Insurance Information Institute, Gusner said. By contrast, only 4.7 percent of Maine's drivers are uninsured, giving it the lowest percentage in the United States, she said.
"That's something of great concern for AAA Oklahoma," Mai said. "For a number of years, my No. 1 concern was to encourage the Legislature to pass a law outlawing texting while driving.
"Well, we got that. My new No. 1 concern is trying to do something to reduce the extraordinarily high rate of uninsured motorists."
The insure.com report uses the average rates for the 20 best-selling vehicles for 2016 to date. By highlighting the most popular vehicles, averages are more accurate without high-end sports or luxury cars slanting the data.
An Internet marketing and media company based in Foster City, California, insure.com commissioned Quadrant Information Services to calculate auto insurance rates from six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm) in 10 ZIP codes per state during February 2016.
Rates were averaged in each state for the cheapest-to-insure 2016 model-year versions of America's 20 best-selling vehicles and ranked each state by that average. Rates are for comparative purposes only within the same model year.
Rates are based on full coverage for a single, 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage, and actual rates will depend on individual driver factors.
Several years ago, Oklahoma legislators passed a couple of bills designed to mimic Louisiana's approach to mitigating the number of uninsured motorists, Mai said.
Law enforcement now can seize the tag of motorists who cannot show proof of insurance. They then are given a temporary tag and given 10 days to comply with the law, Mai said.
"We've had some hiccups instituting that system widespread in Oklahoma," he said. "But the Legislature is once again taking a look at that and putting some teeth into it and allowing law enforcement a few more tools to make sure that does happen."
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