If you own a car in Georgia, you might have noticed that your car insurance rates have gone up. If so, you’re not alone. Residents across the state have seen a significant increase in car insurance rates, even on policies without a history of accidents.
In 2023, Georgia residents faced a significant hike in car insurance rates, with premiums skyrocketing by 22% from the previous year. This surge surpassed the national average increase of 19.2% from October 2022 to October 2023, as the U.S. Bureau of Labor Statistics reported. For many in the Peach State, this cost rise has worried about what this means for the future and how high insurance rates will climb.
Why Did Insurance Rates Get Higher in Georgia?
A comprehensive study by MarketWatch noted that the state witnessed a higher number of accidents, leading to larger payouts for property damage and medical claims. Additionally, the frequency of car thefts and break-ins has escalated, further compounding the issue.
In 2022, the average annual premium for full coverage in Georgia was $1,617. By 2023, this figure had leaped to $1,973, marking a 22% increase, more substantial than the increases observed in 30 other states.
Increase in Fatal Car Accidents
This significant rise in insurance rates may be due to the increase in fatal accidents, with data from the National Highway Traffic Safety Administration (NHTSA) indicating a 26% increase in fatalities from 1994 to 2021. In addition, between 2019 and 2021, Georgia saw a 35.4% increase in deaths per million miles traveled, contributing to higher insurance premiums due to more substantial payouts by insurers.
Higher Cost of Vehicle Repairs
Despite a 13.3% decrease in fatal accidents from January to June 2023 compared to the same period in the previous year, the cost of repairs and the incidence of thefts have pushed insurance costs higher. The Bureau of Labor Statistics reported a nearly 10% increase in repair costs in October compared to the year before.
When vehicles are involved in accidents, even if they’re not fatal, the higher costs to repair these vehicles mean that insurance companies need to spend more on each claim. To cover these increased costs, insurers raise premiums across the board.
The general trend of rising prices, as indicated by the increase in repair costs, reflects broader inflationary pressures that affect the automotive repair industry. Insurers must adjust premiums upwards to keep pace with these increasing costs, ensuring they can cover future claims.
Higher Car Thefts in Georgia
The Insurance Information Institute highlighted Georgia’s significant issue with motor vehicle thefts, which currently ranks 10th in the country for the number of car thefts. Insurance companies calculate premiums based on the risk they undertake to insure a driver or vehicle. A higher incidence of car thefts signifies a greater risk that the insurer might need to pay out claims. To offset this increased risk, insurance companies raise premiums.
In addition, when theft rates are high, insurance companies typically face more claims for stolen vehicles. This not only includes the cost of replacing the stolen vehicle but may also involve paying for any damages incurred during the theft or recovery process. To cover these higher operational costs, insurers adjust their rates upwards.
What Is Georgia Doing to Combat Rising Insurance Costs?
In response to these soaring costs, Georgia legislators have decided to take action. In July 2023, Governor Brian Kemp signed House Bill 221, enabling the Georgia Insurance and Safety Fire Commissioner to review all insurance rate filings before they take effect. This measure gives the commissioner the authority to disapprove minimum policy costs and introduces a 60-day delay for the office to research changes, potentially slowing the rate of insurance cost increases.
Despite these efforts, MarketWatch warns that Georgia drivers may see further rate increases in 2024. Factors such as inflation continue to exert upward pressure on costs, making rates unlikely to start falling soon.
Higher Insurance Rates May Result in More Uninsured Drivers on Georgia Roads
In Georgia, drivers are legally required to carry a minimum insurance coverage. However, the rising costs of insurance premiums may result in more uninsured drivers on the roads.
It’s estimated that a significant percentage of drivers in the state operate their vehicles without any insurance coverage despite the legal requirements. If you’re involved in an accident with an uninsured motorist, you may face challenges in receiving compensation for damages or injuries.
Although uninsured motorist coverage is available and can protect you in such scenarios, not every driver opts for this additional coverage. As a result, car accidents involving uninsured drivers can lead to complicated legal and financial burdens for everyone involved.
Contact Our Georgia Car Accident Lawyers
If you or someone you love is injured in a car accident in Atlanta, the car crash lawyers at Kim Law can help. We can help you obtain the money you need to recover from your accident and rebuild your life. Even if you get into an accident with an uninsured driver, our attorneys will fight to help you get the money you need.
Our Atlanta car accident attorneys can help you after a devastating auto accident. Call us today and JUST WIN!
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