Auto insurance is an insurance policy that covers individuals or companies against the cost of auto-related damages to third parties, and their properties. It may also cover damages inflicted on the insured's vehicle in case of fire, accidents, or theft.
The digital age has brought a lot of challenges to auto insurance. Advancement in auto technology like autonomous vehicles and ride-sharing has brought lots of changes. We put together some notable auto insurance statistics to give you a good overview. So keep reading!
The auto insurance industry has taken on a whole new level of importance in recent years. Urbanization and the increased number of motorized vehicles on roadways have led to an auto accident rate of about 105 per day. The daily loss of lives and property in car accidents has made insurance a compulsory part of vehicle ownership in the US and in many countries globally.
The market value of the US automobile insurance industry now stands at $288.4 billion. The market has grown at a rate of 2.7% on average over the last 5 years with more vehicles added to the market and more insurance companies rising across the country. Auto insurance stats from recent research also predicted a growth rate of 1.1% in 2020 and with the continued growth of the automobile industry, insurance is set to pass $300 billion in value over the next few years.
Auto insurance policies provide coverage in cases of theft and accidents and 49 of 50 US states have consequently made it mandatory for drivers to have auto insurance. Research figures show that 87% of drivers in America have some form of auto insurance. The remaining 13% are driving uninsured vehicles either illegally or while living in a region that doesn’t require car insurance. This means about 32 million motorists in America are uninsured.
(National Highway Traffic Safety Administration)
Car theft is one of the major reasons for insurance. While the rate of vehicle theft has been on a decline for over a decade, recent studies show that an average of 770,000 vehicles still fall victim to the crime of theft, a rate of over one per minute. Auto insurance statistics 2017 also show that over three-quarters of a million cars were stolen, with nearly half of them originating from driver errors. So the cost of vehicle theft for that year is coming in at nearly $6 billion.
The commercial auto insurance industry has grown at a steady rate over the last few years. Statistics on commercial auto insurance reveal that the market size of the industry has grown at an average rate of 4.9% per year from 2015-2020. The growing fleet of commercial vehicles and increased prices in the automobile market contributed to this growth and the industry is now worth $46.6 billion, with the market set to grow a further 0.7% in 2020.
The United States is one of the most expensive countries in the world for car owners. The average cost of car insurance in the country is $1,548, an increase of over 5% from 2019’s figure of $1,470. That also translates to about $774 per six-month policy or $149 per month.
With the average national income at around $50,000, this also means Americans spend around 3% of the annual incomes on auto insurance. Granted, insurance policies in the US are implemented by the state, so the average cost of insurance dips below $1,000 in some states, while other states see residents pay upward of $2,000 on auto insurance.
Despite the challenges the industry has faced in the last couple of decades, the auto insurance industry both in America and globally has continued to grow at a steady rate. The Influx of new companies as well as investment in the industry has seen it evolve and develop into one of the world’s premier industries today.
According to auto insurance data, US auto insurance was already a lucrative industry at the start of the decade. Research stats show that the industry was already worth $220 billion as of 2010. With a steady growth rate over the next few years, the industry was worth $250 billion in 2015.
Continued urbanization, the influx of personal vehicles, and the booming ride-sharing industry meant auto insurance in the US grew at a rate of 2.7% per year between 2015-2020. Its current valuation of $288.4 billion is reflective of the industry's growth over the decade.
The amount of losses incurred annually on auto insurance has been on a steady rise throughout the decade. Auto insurance statistics in 2011 show that $117 billion were incurred that year in auto insurance losses across the US. That figure steadily grew and reached $145 billion in 2015.
Auto insurance stats in 2016 show a rise by almost 20 million within the next 12 months as $163 billion were incurred in losses across the year. There was just a $4 billion increase from 2016 to 2017. The research figures from 2018 show that $173 billion was lost in the US across the year.
(Canadian Under Writer)
The global auto insurance market grew by 2.9% between 2010 and 2014 with a CAGR of 5.1%. This brought the industry’s global value to $669.7 billion by late 2014. Auto insurance data for 2014 shows that the market value for the year was broken down between $460.1 million in personal car insurance premiums and $209.6 billion in commercial car insurance premiums. The global industry is now estimated to be worth over $880 billion.
The United States is the second-largest automobile market in the world only behind China. The large number of registered vehicles in the country has played a primary part in the nation's lucrative auto insurance industry.
Statistics from the car insurance database show that the number of registered vehicles across the country has been on a steady rise in the last few years. Approximately 250,000 vehicles were registered in 2010, with that number steadily rising to 263,000 vehicles in 2015, before reaching 273 million in 2018.
There are no federal laws mandating auto insurance for drivers in the US. All auto insurance policies in America are made and implemented at the state level, with each state having its own rules. Factors like population density, average income, and percentage of uninsured drivers can determine the cost of insurance in a state.
Auto insurance is a major expense for car owners in the United States. Not only is insurance expensive, it’s almost always necessary. 49 out of the country's 50 states make car insurance compulsory for every road user, with only New Hampshire making the possession of auto insurance optional and allowing drivers the choice of driving uninsured.
While the state is lenient on auto insurance policies, it remains adamant on the financial responsibilities of vehicle owners and requires all drivers to cover the cost of injury or property damage in an accident they caused.
Since insurance is handled at a state level in the US, every state differs in policies, implementation, and cost. Recent studies show that Michigan is the state with the highest average car insurance cost in the country, making 2020 the 7th year in a row and 9th time in 11 years the state has topped this particular statistic.
The average car insurance rate in the state is $3,400, more than double the national average, making it the only state to cross the $3,000 mark. Louisiana is the second most expensive state, with an average insurance premium of $2,608 followed by Nevada with $2,486.
Maine is the state currently with the lowest insurance rates across the country. The average annual insurance premium in the state is just $1,062 according to recent auto insurance rates stats, about $400 below the national average.
New Hampshire, the only state in the country where auto insurance isn’t mandatory unsurprisingly also has a very low average insurance premium. They are narrowly beaten by Maine with an average premium of $1,070, among them the 48th highest state in terms of average auto insurance expenses per year in the US.
According to the latest report on auto insurance statistics by state, Florida has the highest rate of uninsured drivers in the US. The report shows 26.7% of road users in the state drive uninsured vehicles, 13.7% above the national average. While a lot of factors can determine the rate of auto uninsurance in a state, Florida's high figures have been attributed to low income and lack of implementation of policies by the authorities. On the other side of the spectrum, Maine has the lowest rate of uninsured drivers in the US with just 4.5%, an expected figure considering the state has the cheapest auto insurance premium nationwide.
Research has shown that demographic factors can play a part in insurance rates. Research into automobile insurance stats hints that age, income, gender, and other demographic factors heavily influence insurance rates in America.
While old and middle-aged women, in general, pay more on average in auto insurance, statistics reveal that the reverse is the case among younger Americans. Recent car insurance data shows that male teenagers pay up to 14% more in auto insurance than females, reflective of their tendency to take risks, drive recklessly, and file claims. As drivers age, their auto insurance expenses drop as is reflected in Americans aged 20-24, where males pay 8% more than females in insurance premiums.
Men pay more in insurance among younger Americans, but the tables turn considerably as they grow older. According to statistics, women aged 26-30 pay 3% more in insurance than men. Women in this age group pay an average of $2,591 compared to $2,518 for men. The gap in insurance premium expenses widens slightly as they get older, with women aged 31-35 paying 5% more in insurance premiums than men in the same age group.
Getting married can lower your annual car insurance estimate. Due to married couples likely sharing driving responsibilities, the premium rate for both individuals is reduced compared to the average single driver in the US. The average annual premium for a single American is $1,470 compared to $1,381 for a married individual. Married couples are advised to revisit the insurance policies for this reason; when featuring in other discounts, shared insurance can save both individuals upward of $100 per year.
America is home to some of the biggest auto insurance companies worldwide. According to US auto insurance statistics, there are over 8,000 auto insurance businesses across the country. It’s an expected large figure, considering the US had the second-largest automobile market in the world. With even more companies springing up daily, competition in the market has never been higher.
Despite a large number of auto insurance businesses in the US, the market is dominated by a few elite companies. These companies include the likes of State Farm, GEICO, Allstate, Progressive, and USAA, Nationwide Insurance, and a few others.
State Farm tops the list of car insurance companies in the US and is one of the biggest worldwide. They dominate the market in nearly every statistic and control 17% of the US market share in private auto insurance. They have $42 billion worth of premiums written, $9 billion more than the second-biggest company, and approximately 1 in every 5 dollars spent on auto insurance payments in the US is paid to them. GEICO is next in line with a market share of 13% and $33.1 billion worth of premiums written. Progressive and Allstate follow with a combined 20% of the market share going to them.
Progressive is the third biggest auto insurance company in the US with an 11% share in the private insurance market, however, it’s in commercial auto insurance where they truly dominate. They control 10.9% of the commercial market, the highest in the country, with $4.4 billion worth of premiums written. Travelers are the second biggest company with a 6.3% market share followed by Liberty Mutual and Nationwide with 4.4% and 4.0% each.
An insurance claim is a request made to an insurance company for coverage. Auto insurance claims on average, upward of $170 million in the US each year. With the amount of traffic and VMT recorded in the United State, auto insurance claims are expectedly frequent and expensive in the country.
Minor accidents or “fender benders” as they are commonly called are the most common insurance claims in the US. These are accidents with minor damage to property and no injuries to people. Windshield damages are the second most common insurance claims, with vandalism, storm damage, single-vehicle collisions, and theft following in the list.
According to auto insurance claim statistics in the US, America has one of the highest frequency of insurance claims worldwide. However, that has been attributed to the high number of car owners in the States. Individually, statistics show insurance claims are few and far between with collision or minor accident claims made once every 3 years by the average driver.
Comprehensive claims (vandalism, theft, and weather damage) are made once a decade, and claims for serious accidents or damage to property and persons are made once every 18 years by the average American.
(Insurance Information Institute)
Collision claims are claims to an insurance company or payment of cost in repairing one's vehicle regardless of who is at fault for the damage. According to the car insurance claims database from 2018, 6.1% of all collision insurance policyholders in the US had a claim. The average cost of collision claims across the year was $3,574, a $796 increase from 2010.
Insurance fraud generally entails an individual attempting to collect insurance money he/she is not entitled to. According to insurance fraud statistics, fraudulent claims take up to $80 billion annually across all forms of insurance, and fraud has long been a problem with auto insurance.
(Insurance Information Institute)
Based on statistics on auto insurance accident claims, 2012 saw one of the highest percentages of fraudulent claims in recent years. According to the research, 15%-17% of all bodily injury claims in 2012 were fraudulent. This mostly accounted for claims involving chiropractic treatment, physical therapy, and other medical expenses. In other words, excess payments due to fraudulent bodily injury claims in 2012 amounted to between $5.6 billion and $7.7 billion.
Premium leakage refers to omitted or misrepresented information that leads to lower rates or inadequate insurance. According to auto insurance claim data, premium leakage can occur multiple times across the life cycle of an insurance policy and it costs companies in the US up to $29 billion annually. Common sources of premium leakage include unrecognized drivers and underestimated mileage.
Liability coverage is mandatory in most US states as the minimum requirement to drive a car. Liability coverage basically entails that a driver is legally responsible for any damage he/she causes while driving.
There are two types of liability coverage, bodily damage, and property damage. Bodily damage coverage helps pay for costs related to bodily injuries inflicted on others while driving and property damage helps pay for damage to other people’s property.
Uninsured motorist coverage protects you from other drivers who do not have insurance or in a hit-and-run accident. If the other party in an accident is liable and doesn’t have the coverage to pay for expenses related to the accident, uninsured motorist coverage helps cover any medical expenses you may have or other expenses relating to the accident.
Underinsured coverage pays for your expenses when the liable party has insurance but isn’t sufficient to cover all your expenses.
Comprehensive coverage helps cover the cost of damage to your car which wasn’t collision-related. Most common comprehensive coverage cases involve theft, vandalism, and fires. If any of the aforementioned circumstances occur, comprehensive coverage helps repair or replace your vehicle. Other common causes of comprehensive coverage include accidents with animals, broken glasses, weather damages, and falling objects.
Collision coverage pays for damages to your vehicle after accidents with other road users. This form of insurance is usually used in cases of minor accidents like a collision with another vehicle or hitting a fence. Collision coverage helps repair or replace your damaged vehicle.
The insurance industry is constantly changing and adapting to the current situation. As technology continues to change our everyday lives, the auto insurance industry faces more challenges than it ever has as urbanization slowly eradicates the old way of doing business.
However, the industry seems to be growing at a healthy rate and is projected to be worth as much as $300 billion within the next few years. All in all, United States auto insurance statistics point toward a positive future for the insurance industry in the US and on a global level.
The auto insurance industry in the US has a market value of $288.4 billion. The global industry is worth a reported $888 billion and is expected to grow at a rate of 6% CAGR between now and 2024.
Auto insurance statistics show that about 87% of all Americans have auto insurance with 13% driving uninsured.
Auto insurance statistics show the average American spends up to $1,548 annually. That equates to $774 per six-month policy or $129.
Auto insurance policies are implemented at the state level and it is mandatory in 49 out of 50 states in America. The only state where auto insurance is not made mandatory is New Hampshire.
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