Little Rock, Arkansas – The cost of car insurance is rising nationwide, but particularly in Arkansas.
Many vehicle insurers recently filed increases, according to compliance rate change filing data with the Arkansas Insurance Department.
There have been increases in all of the insurance companies’ most recent rate modifications, ranging from 5% to almost 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.
According to Harris, rate rises are being closely monitored and are raising concerns. He said that a significant contributor to the rise in Arkansas’ insurance companies’ loss ratio.
“From 2022 it was almost 94 percent loss ratio,” Harris said.
The loss ratio is the difference between the premiums companies collected and the amount of losses they incurred.
Insurance companies are increasingly attempting to assist their clients in reducing the rising prices.
“Extraordinary times for the insurance market. In my 15 years, I’ve never seen anything it like this,” said Joseph Bailey, owner of Arkansas First Choice Insurance.
Bailey claimed to be able to observe the effects 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.
According to him, companies are hiking rates to adapt for inflation-related increases in repair costs and weather-related damage to vehicles.
“With those rising costs, those go back to the insurance companies, and then the insurance companies have to offset it,” he said.
As a result of the premium rate changes, Bailey’s team is currently discussing coverage options with its clients and employing tools like raising deductibles.
The severity of the claim, according to Harris, is another aspect that could contribute to an increase in your next auto insurance rate. Each liability, collision, and property damage claim now costs on average more money.
According to data from the Arkansas Department of Finance and Administration, there were 2.7 million registered passenger vehicles in Arkansas in 2019. The uninsured rate for those vehicles was 16 percent.
It has decreased to 8.7% percent. Leaders of the department attribute this decline to the method for online insurance verification.