Mississippi auto insurance rates set to increase

Mississippi auto insurance rates set to increase

MISSISSIPPI (WDAM) - Mississippi drivers can expect to see their auto insurance rates to increase.

"They need to understand that insurers have increased loss costs," said Andy Case, Consumer Services director for the Mississippi Insurance Department. "They've determined it's not short-term trend. Sometimes we'll tell an insurer to hold off and 'let's kind of watch,' but this seems to be a long term trend, seems to be here to stay. As a result, they're going to seek some relief from the additional costs that they're saddled with, and we expect that to come in the form of request for higher rates from a lot of companies."

One reason for the increase, Case said accidents are happening more often across the country, and it's a trend Brad Keith, owner and partner of Keith and Lowrimore Insurance, said he has seen in the Pine Belt.

"What we've seen here at our agency is a significant increase in auto accidents over the past year or so, probably more than I've seen in the 15 years I've been in insurance," Keith said.

Joe Woods, vice president of state government affairs for the Property Casualty Insurers Association of America, said he has seen the same increase in the same time frame.

"Since the end of 2014, there's been a surge in the number of accidents," Woods said. "The increase is across the country, but the increase in Mississippi is greater than in most states. Mississippi's increase was about 16 percent over the last two years, and it put it in the top 10 states in the country as far as that increase, that alarm bell that went off for us."

Now those crashes are costing all Mississippi drivers.

"We all share the risks and the cost," Woods said. "All of us drivers, you know, we're pooling our money. The folks who have wrecks this year pull out of that pool, and we hope we're not in that category. And we get discounts if we don't have wrecks over awhile, have a good driving record, but the base rate from which that discount is determined is going to tick up as overall costs go up."

Case said, "I would expect that toward the end of the summer and the beginning of fall, a lot of folks will begin to see the increases."

Keith and Woods think distracted driving has played a major role in accident increases.

"We're seeing a lot of rear-end collisions where potentially it's texting, it's playing with a navigation system or whatever the distraction may be, and it's causing problems," Keith said.

Woods said, "I think country-wide, distracted driving is one of the main drivers of this. Mississippi was slow to get an anti-texting bill, and still haven'passed a 'no hand-held telephone' bill in the car."

Case said along with more accidents, Mississippi is also seeing increased car repair costs.

"Even though we sort of mirror the country in the frequency increase, we are far out pacing everyone else in the cost of those claims," he said. "The automobile repair is, for whatever reason, in certain markets in Mississippi, we are higher than anywhere else we've been able to find in the U.S. We've had annual increases since 2010 until this year, but the increase we had in January 2015 was the largest one yet."

Case said that most recent jump was about an 18 percent increase in auto body repair costs.

"To give you some idea, in 2010, we were probably at $45-$48 and hour (for auto body repair costs)," Case said. "We're at $65 now. By comparison, Birmingham, Alabama is at $48. Areas of Louisiana are $48. Nashville, Dallas, Atlanta, and so on, the national average is $49. Insurers are really getting pressure from both sides: increased number of accidents and those accidents are costing more and more."

Another factor impacting costs is more drivers are spending more time on the road, and those roads are not in good condition.

"We have a lot more activity on Hardy Street and in the Pine Belt as far as our population's increasing, and you know, when you have increased population, you're going to have more accidents," Keith said.

Case said, "Our roads are not great, and that causes traffic congestion. In other words, in Jackson, we know that there's 38 hours of annual delay per vehicle. That equates to about 12.4 million hours per year. You compare that to Gulfport, and they're at 4.4 million hours a year. Why is that? Well, I don't think we have that much more traffic, but a lot of it's road condition. You've got roads that are under construction, in poor condition, and that slows the daily commute down. The longer you're on the road, the more likely you are to be involved in an accident."

Woods said, "The highway system is deteriorating. A lot of the roads in mot of the states are currently, there are a lot of roads that need repairs. I know in Mississippi, the congestion in Jackson means a lot more time on the highway for people, and when people are stuck in traffic on the interstate going 5 miles an hour, that's when they're tempted to just give a quick check on the emails. And that's when the guy in front of them stops, and they don't realize it."

Keith said the easiest way to keep rates low for everyone is to pay attention while driving to hopefully prevent an accident from happening.

"We can all pitch in and put your phone down," he said. "If it's something that's an emergency, pull over to the side of the road in safe spot, in a parking lot, something like that, and that's the best way to prevent accidents, especially rear-end accidents. Keep the distractions to a minimum."