JONESBORO, Ark. (KAIT) – Auto insurance rates are up across the country, especially in the Natural State.
The registration of over 2.7 million passenger vehicles in Arkansas is overseen by the Arkansas Department of Finance and Administration.
For those Arkansas drivers, getting behind the wheel could be costing them hundreds.
Millions drive each day to get home or to work, but making sure you are insured once you get behind the wheel is getting expensive.
According to compliance rate change filing data with the Arkansas Insurance Department, a large portion of auto insurers recently filed increases.
All of the recent rate changes from insurance companies show increases ranging from 5% to nearly 20%.
“For private passenger auto, it was the highest among all major lines of business, it was a little over 80 percent nationally,” said Jimmy Harris, compliance director with the Arkansas Insurance Department.
Harris said they are constantly watching rate increases and it is causing concerns. He said insurance companies’ loss ratio in Arkansas is a major factor in the increase.
“From 2022 it was almost 94% loss ratio,” Harris said.
The loss ratio amounts to how much companies paid out in relation to how much premium they received.
Insurance agencies are now working to help their customers offset the rising costs.
“Extraordinary times for the insurance market. In my 15 years, I’ve never seen anything it like this,” said Joseph Bailey, owner of Arkansas 1st Choice Insurance.
He said he can see the impact of the rise.
“We have a lot of insurers that will reach out to us, probably more than we have ever seen in the past, asking us for quotes to shop their insurance,” Bailey said.
He said between inflation causing higher costs on repairs and weather events damaging vehicles companies are raising rates to adjust.
“With those rising costs, those go back to the insurance companies, and then the insurance companies have to offset it,” he said.
Now his team is going over coverage options with their customers and using options like increasing deductibles to help with the premium rate changes.
Harris explained another factor in the increase you could see on your next auto insurance bill is claim severity. The average cost of each claim for liability, collision, and property damage increased.
Out of the 2.7 million registered passenger vehicles in Arkansas, the uninsured rate in 2019 was at 16% according to Arkansas Department of Finance and Administration data.
The rate is down to 8.7%. Department leaders credit that decrease to the online insurance verification system.
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