Gary Easterling only has to travel about half a mile to get to work at Chapel Hill Pharmacy, which he has owned for the past six years off Texas Highway 64 just east of Tyler.
Not only does Easterling save money on gas, he also lives in a zip code that enjoys the Tyler area’s lowest average automobile insurance rates, according to a recent Texas Department of Insurance report.
In addition, his carrier, State Farm, has dropped his rates the past two years, the report shows.
“That’s nice to know,” Easterling, 50, said Monday from behind his pharmacy’s counter. “You just assume everything goes up.”
But while some carriers such as State Farm and Progressive have posted premium decreases the past two years, most have raised rates, with the average percentage increase of about 7.3 percent the past year.
Of the 37 providers that the Texas Department of Insurance lists for the Tyler-area market, 21 of them, more than half, raised rates the past year, according to www.helpinsure.com, a site run through state insurance department and Office of Public Insurance Counsel.
Some insurers’ rates increased by double-digit percentages the past year alone. Five insurers had no rate changes.
Industry representatives attributed the increases to a variety of possible factors, from auto crimes to medical costs to simple supply, demand and market competition.
A look at nine Tyler-area zip codes showed rates ranging from $522.73 for the 75707 zip code just east of the city to $529.67 for 75704 to the northwest. USAA County Mutual Insurance Co. posted the area’s lowest rate at $282, while Esurance Insurance Co. carried the highest at $1,012.
The rates were based on basic coverage for a married male between ages 25 and 65 with average credit and no traffic violations who uses a car to get between home and work.
Jerry Hagins, Texas Department of Insurance assistant director, said auto rates statewide went up about 5.5 percent the past year.
Hagins said average rates for the state were not immediately available.
Jerry Johns, president of Southwestern Insurance Information Service, an industry trade association, attributed rising auto insurance rates partly to an increase in medical costs.
“Various medical services play a huge role in determining automobile insurance rates,” Johns said.
He said auto thefts and burglaries also are factors.
Tyler, for example, saw 213 auto thefts in 2008, the highest in five years and a 43 percent increase from the 149 the previous year, according to Tyler Police Department figures.
Mitch Denson of Hilliard Box Insurance said that while some rates have gone up, overall it hasn’t been exorbitant.
“There’s always going to be adjustments, but they’re based on the number of claims filed,” Denson said. “What’s the most difficult thing to estimate is the number of bodily-injury claims.
“There will always be market adjustments from time to time.”
Hagins said the auto-rate increase also could be part of the industry’s natural cycle.
“We get hundreds of rate filings every year,” he said. “The majority are revenue neutral. There’s going to be movement up and down.
“In the auto insurance area, we’ve had some upward movement in the last year or two related to business cycles, not related to any particular event. The business cycle is prices go up, they even out and they go down again. Texas has had either low or decreasing rates for the past 10 years.”
He added that the increasing cost of auto repairs also could be a factor.
Hagins said fierce industry competition in Texas keeps prices in check.
“It’s an extremely competitive business in Texas,” he said. “A lot of that has to do with insurance reform passed two legislative sessions ago.”
As for why one company would charge as little as $282 and another more than $1,000, Hagins said coverage variables and clientele can be part of that.
“They all have their own business models, and they determine rates on what they feel would be projected losses,” he said.
Source
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment