District of Columbia Pays Highest Insurance Rates to Drive

Drivers in the District of Columbia pay the highest combined average automobile insurance premiums in the United States, taking the top spot from New Jersey.

The National Association of Insurance Commissioners has released its 2005/2006 Auto Insurance Database Report, which indicates the District of Columbia leads the auto insurance pack with a combined average insurance premium per vehicle of $1,315.55 in 2006, down from $1,345.58 the year prior.

The state combined average premium is calculated by summing the average premiums for liability, comprehensive and collision coverages. The result is the average price for a policy that contains all three, the NAIC said.

The drop in premiums in D.C. wasn''t enough to keep New Jersey in the top spot among the most expensive auto insurance regions. The Garden State had a combined average insurance premium of $1,284.43 in 2006, down from $1336.80 in 2005.

According to the NAIC report, the rest of the top five regions in most expensive auto premiums for 2006 were: Louisiana, with $1,254.66; New York with $1213.14 and Rhode Island, with $1197.81.

Throughout the United States, rates have continued to fall, according to the report. The combined average premium nationally was $936.60, down from $954.02 in 2005 and $967.28 in 2004.

According to the report, Iowa had the lowest combined average auto premium in 2006 at $644.49, followed by North Dakota with $688.58.

The NAIC cautions against state-to-state comparisons because many factors affect a state''s average premiums, such as underwriting costs, accident rates, traffic density, auto theft and state regulation.

In 2007, the top five writers of private-passenger auto in the United States, according to A.M. Best Co state/line product information based on direct premiums written, were: State Farm Group with a 17.5% market share; Allstate Insurance Group, with 11.3%; Progressive Insurance Group, with 7.3%; Berkshire Hathaway Insurance Group, with 7.2%; and Farmers Insurance Group, with 5.5%.

(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)

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