Crash Statistics Affect Auto Insurance

Posted in Auto Insurance

September 25th, 2009

Annually, there are 6 million auto accidents and 40,000 of them result in death for one of the involved parties. Aside from human life, their is an additional cost burden generated as a direct result of these accidents, and the overall cost of auto insurance rates fluctuate in direct correlation to this saddening formula.

Teenage Driver Statistics

The easiest example to highlight is the effect of crash statistics on car insurance for teenagers. According to information provided by AAA, teenagers aged 15-17, (the highest risk group of drivers), cause nearly $34 billion dollars of damage annually due to their lackluster driving. This demographic has statistically proven that they have a higher crash rate than any other age demographic. Because of this documented fact, insuring teenage drivers is the most costly auto insurance proposal, with the state of Louisiana topping the list at nearly $8000 to insure one driver in that demographic.

Costs Passed On

To offset the loss incurred by auto insurance providers, further revenue must be generated, and the easiest way is by passing on the additional expenses to all policyholders. The cost of paying for accidents costs Americans more than $1,000 a year per driver, mostly included in their insurance premium.

The good news is that with a reduction of crash statistics, consumers can expect to see their auto insurance rates lowered. In fact, 2008 had the lowest collision rate on history since 1961 and that trend followed into the beginning of 2009, thus several states actually had lowered auto insurance rates ().