American Property Casualty Insurance Association: High Levels Of Fatal Crashes, Inflation And Supply Chain Issues Drive Insurance Costs In 2022

CHICAGO, Illinois, Feb. 2 (TNSres) -- The American Property Casualty Insurance Association issued the following news release:

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Insurers Encourage Greater Roadway Safety

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With fatal accidents and crashes nearly equaling five-year highs in Illinois, skyrocketing inflation and supply chain challenges, auto insurance costs continued to climb in 2022. When the costs associated with insurance, such as crashes, medical and legal costs rise insurance must reflect the costs for the goods and services it pays for.

"Everything that insurance pays for has increased, nevertheless, it is also important to consider that Illinois auto insurance rates are lower than other states with large urban populations," said Brooke Kelley, assistant vice president for state government relations for the American Property Casualty Insurance Association (APCIA). "Even though 88 percent of Illinois' population is in urban areas and the state has the third most populated city in the nation, Illinois drivers, on average, have long been in the middle tier (or middle third) of the nation regarding the cost of insurance. This benefits Illinois drivers." The NAIC's latest data (2019) show that Illinois' annual full coverage premium is 15.5% lower than the countrywide average.

Allegations, by PIRG that insurers overcharged customers during the first year of the COVID-19 pandemic could not be further from the truth and demonstrate a fundamental misunderstanding of how the industry operates and what has occurred in the auto insurance marketplace since the pandemic.

"The data shows insurers took appropriate steps immediately following the COVID-19 pandemic shutdowns and issued more than $14 billion in premium reductions as miles driven declined," said Kevin Martin, executive director of the Illinois Insurance Association (IIA). "However, that decline was short-lived, and miles driven quickly rebounded to pre-pandemic levels."

As miles traveled declined, insurers quickly responded with premium giveback programs. However, the number of miles driven rapidly returned to pre-pandemic levels. Additionally, driving habits have changed since the start of the pandemic and they continue to show that more dangerous driving habits such as speeding and not wearing seat belts have emerged and are continuing.

"Rather than blaming insurers for higher costs, we challenge groups like PIRG to join us in encouraging drivers to minimize their risk by avoiding risky driving behaviors that may result in a loss," said Kelley. "Insurers are also advocating for better infrastructure, including reliable supply chains for critical auto parts and safer roads, which should result in fewer accidents and lower claims costs that help keep insurance premiums affordable for consumers."

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Original text here: https://www.apci.org/media/news-releases/release/74509/