Cheap Auto Insurance

Cheap Auto Insurance

The days of cheap auto insurance might be well beyond us. State Farm asked to raise auto insurance rates this week, just weeks after another insurance giant and fellow competitor Allstate  started raising average statewide rates for certain policies.

State Farm spokeswoman Michal Connolly had this to say about the recent price spike:

“The request was necessary because of our cost of claims reflective in the auto insurance policies”

The Illinois-based insurer filed with regulators several days ago for an average 9.2 percent rate hike for its 2.7 million auto policies statewide. The Florida representative of the Insurance Information Institute, tied the rising cost of auto insurance in part to the recession. Fewer people are buying insurance, or they are buying less than they need, which forces other drivers to make it up through higher premiums.

State Farm Fire is the 12th largest auto insurance company with $204 million in premiums.

Allstate and State Farm have reported higher costs for many different cases including bodily injury, personal injury protection and uninsured motorists coverage. Chris Neal, a spokesperson for State Farm said the company has had an increase in the number and amount of claims.

“We have also seen an increase in fraud activity referrals, which could be a result of the economic downturn.”

cheap auto insurance