U.S. auto rates expected to rise 1.5% in 2005: III

The Insurance Information Institute (III) says auto rates in the U.S. should increase 1.5% in 2005, the smallest increase in the last five years.The average auto premium per vehicle this year should be US$870, up US$13 over last year. In 2004, rates rose an average 2.8%. III chief economist Robert Hartwig notes that the 1.5% rate increase represents about one-half the rate of inflation.Frequency has dropped, he adds, but severity remains high. “Unfortunately, while drivers today are filing fewer claims, those that are filed cost more. It costs more to repair vehicles, particularly following accidents involving sport utility vehicles.”But fixing people also carries a significant price tag, with one in four accidents resulting in injury, and average cost for treating auto accident injuries at least US$6,000-$9,000. And higher jury verdicts in auto liability cases are also taking a toll, with the III citing Jury Verdict Research data suggesting the average jury award in such cases is more than US$220,000.