CFA Auto Insurance Study Shows a Highly Competitive Auto Insurance Market

CHICAGO, IL – The following statement by the Property Casualty Insurers Association of America (PCI) is in response to the recent study by the Consumer Federation of America (CFA) in auto insurance rating. The following statement can be attributed to David Snyder, PCI’s vice president of policy development and research.

“It’s important for consumers to realize that insurance pricing, including discounts, is subject to rigorous actuarial standards and state regulation which ensure that all rating factors comply with the law. CFA’s own research demonstrates that we have a highly competitive market where there is a wide range of types of discounts that are offered and for how much. PCI agrees with CFA’s recommendation that consumers should shop around to compare ultimate rates for car insurance including discounts that are available.

“Many insurers do provide renters and car insurance discounts as well as homeowners and car insurance discounts all the time. The ability to save by purchasing multiple products or services from the same carrier has long been accepted throughout our economy, in areas far beyond insurance. The reason is simple, it costs less to provide multiple things at the same time and customer loyalty is important to any business. That’s also true of insurance. And ultimate rates should be compared with and without the property insurance discounts.

“In response to a comment from CFA about use of prior driving history, it’s important to note that driving records are increasingly incomplete as sources of information on actual driving experience. Municipalities and states are increasing the amount of damage that has to be involved before a police report is taken and many states allow drivers to ‘mask’ traffic violations via supervision or traffic school programs as often as once per year, limiting the information actually available, so other factors are used that accurately predict risk. And the discounts available from insurers help lower otherwise higher prices.”

PCI is composed of nearly 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write more than $183 billion in annual premium, 35 percent of the nation’s property casualty insurance. Member companies write 42 percent of the U.S. automobile insurance market, 27 percent of the homeowners market, 32 percent of the commercial property and liability market and 34 percent of the private workers compensation market.