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How Much Do Auto Insurance Claims Cost?
You buy auto insurance for protection in the event of a future calamity— and since very few people can actually read minds or predict the future, auto insurance companies rely on insurance actuaries to predict the likelihood of risk tomorrow and figure out the right price today.
Below are some facts insurance actuaries use to help them determine your auto insurance premium. Keep in mind that as costs rise for claims payments, so do auto insurance premiums!
Medical Costs
Every year over 2 million people are injured in car accidents. In 2003, the average medical cost for treating one person involved in an auto accident ranged between $6000-9000. However, in many cases, the cost for hospitalizing someone can be thousands of dollars more!
Experts from the Insurance Journal www.insurancejournal.com estimate that insurance companies will pay $15 to 20 billion in medical claims in 2004.
Repair Costs
In 2003, over $80 billion was paid for liability claims. As the cost to repair vehicles increases so do auto insurance claims.
Soon, generic parts will no longer be accepted to fix damaged vehicles— which means a significant increase in the cost of making repairs and paying auto insurance claims. The Insurance Journal estimates that the use of name brands will cost drivers and auto insurance companies around $5 billion more annually!
Court Costs
Liability on some auto accidents is argued about in court, costing injured parties and their insurance companies, thousands of dollars every year. Jury Verdict Research reports that the average award for an auto liability case in 2001 was over $300,000!
Theft
The Federal Bureau of Investigation (FBI) reported that there were over 1 million auto thefts in 2003. The average cost per stolen vehicle was nearly $7000— combined this translates into over $8.5 billion in stolen vehicles every year!
Your Auto Insurance Premium
Your auto insurance premium is based on many factors. For more information on how your auto insurance rate is determined, visit Esurance’s Auto Insurance Learning Center.
Shop around for auto insurance and get the right coverage at the right price. See your savings when you get a quote and compare rates with Esurance today.
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