Online Auto Insurance: Price Drops Related to Theft Trends Can Take Time

February 27, 2012 (PRLEAP.COM) Business News
Louisiana's insurance commissioner recently touted positive trends reflected in the state's vehicle theft statistics, saying they are good news for drivers paying for comprehensive coverage (which compensates policyholders in the event of a theft). But whether a policyholder sees a price drop depends on much more than positive statewide data, says

It's true that auto insurance quotes given to drivers seeking comprehensive coverage are affected by theft trends.

But when insurers decide how much to charge for coverage, they will look at much more than just the fact that the FBI recorded a 28 percent drop in Louisiana's annual theft volumes between 2008 and 2010.

First off, insurers tend to rely on their own claims data when deciding how to price policies, and they break the data up into small, digestible bits rather than looking at broad, statewide data.

So while Insurer A may have had a 35 percent drop in comprehensive insurance claims over the past few years, Insurer B may have seen a 10 percent increase. That's good for policyholders with Insurer A and not so good for those insured by Insurer B.

But so let's say you've got an insurance policy issued by Insurer A. Insurer A saw an overall 25 percent drop in thefts, but maybe that drop would've been higher if it weren't for a couple problem areas in the state where theft rates actually went up. If you're an Insurer A policyholder living in one of those problem areas, rates are likely to stay relatively the same or even increase, while drivers insured by the same company in other parts of the state may see a decrease.

And the way comprehensive coverage is priced isn't dependent on just theft rates in the policyholder's area.

Also influencing price are the cost to replace the insured vehicle, claims trends for other incidents covered under comprehensive policies and the insurer's bottom line.

Rather than hoping theft rates will fall, a more immediate way to see savings on comprehensive coverage would be to increase the deductible on a policy, although those who do so will have to pay more in the event that they file a claim.

According to the Insurance Information Institute, raising comp and collision deductibles to $500 from $200 could cut costs on that portion of a policy by 15 to 30 percent.


But regardless of how long it takes consumers to realize savings due to the theft trends, fewer thefts is good for all Louisiana vehicle owners.

According to the FBI data, the annual theft volume fell by more than a third between 2006 and 2010.

For more on this and other coverage issues, head to to get access to informative resources pages and an easy-to-use quote-comparison generator.