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Insurance > Car Insurance
Want to lower your auto insurance cost? Consider moving
CATHERINE STRONG, Associated Press Writer. Associated Press.
Copyright Associated Press
WASHINGTON (AP) - Auto insurance premiums vary by $200 or more for identical cars in different cities, a study by the insurance industry says. Drivers in cities with high auto theft rates - such as Miami, New York City or Newark, N.J. - generally pay the steepest premiums.
In the largest study of its kind, the industry's Highway Loss Data Institute examined insurance losses from theft, vandalism or forces of nature, such as floods, for late-model vehicles in hundreds of cities over a dozen years. It tracked losses on 3 million passenger vehicles.
The losses vary by as much as $250 a year on average per registered vehicle from city to city. Insurers say that cost generally is passed on to consumers in higher premiums on the comprehensive portion of their insurance policies, which covers noncollision damage. Thefts are the biggest single type of dollar loss.
Miami, a city with a large number of auto theft claims, had comprehensive losses at $286 per vehicle in the last three years; theft was $224 of that loss. In the New York-Newark, N.J., area, where theft losses peaked several years ago, comprehensive losses remain generally high at $168.
The national average for comprehensive losses per insured vehicle was $83.
The theft trends have shown up in what people pay for comprehensive insurance.
For instance, a Miami resident with a good driving record could get insurance on the comprehensive section of a policy for a 1997 Ford Taurus or Honda Accord for $278 a year with State Farm.
In comparison, Roanoke, Va., a top 10 city for the least amount of noncollision insurance losses, had an average loss of just $39 per insured vehicle. A Roanoke resident with a good driving record could get comprehensive insurance with State Farm for a 1997 Taurus or Accord for $52 - one-fifth the cost of the Miami resident.
"If you live in an area with a high rate of insurance claims and theft, then your premium is going to be higher," said Dave Hurst of State Farm, the nation's largest auto insurer. "There are big variations in comprehensive insurance rates and part of that is geographical. Also, how much the car is worth has a lot to do with it."
The highest losses in the past three years belonged not to one of the nation's biggest cities but Grand Forks, N.D., which was ground zero for last year's massive flooding when the Red River broke its banks. There, the comprehensive losses averaged a chart-topping $315.
However, North Dakota's flood, something unlikely to be repeated often, probably will not be reflected in the region's auto insurance rates; insurers tend to draw up their rates based on a region's history over many years. A Grand Forks resident, for example, could get comprehensive insurance for the Taurus or Honda with State Farm for $109.
Ranked second in losses was Miami. Over the 12-year span, the losses per vehicle skyrocketed in Miami to $286 from $69 in 1985, while losses in many Texas cities declined sharply, especially in Houston - from $139 to $56. Texas has an extensive auto-theft prevention program.
Law enforcement officers and insurers say cities with large ports, such as Miami and New York, are vulnerable to auto theft because stolen vehicles are increasingly being shipped overseas. The cars stolen for shipment are usually expensive luxury vehicles, while those going across the Mexican border, another hot spot, are usually sport utility vehicles or pickups, officials say.
"There is a pattern of geographic theft losses associated with port cities. Shipments of stolen vehicles overseas is driving this trend," said Kim Hazelbaker, senior vice president of the Highway Loss Data Institute.
Twenty years ago, more than 90 percent of stolen autos were recovered by authorities, said Ed Sparkman at the National Insurance Crime Bureau. Now one-third - roughly 450,000 vehicles - disappear permanently and up to half are being shipped to Europe, Latin America, the Orient or elsewhere, officials said.
Only 1 percent of stolen autos shipped overseas are caught at the port, U.S. Customs officials said. Most are confiscated at the ports of Newark, Miami, Jacksonville and Port Everglades, Fla., and Los Angeles-Long Beach.
Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission.
Companies: State Farm Mutual Automobile Insurance Co(Ticker:X, NAICS: 524126, Duns:00-692-8097 )
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