Auto insurance cost to rise by 0.5% in 2006, the smallest increase in six years

The cost of auto insurance is expected to rise by 0.5 percent in 2006, the smallest increase in six years, reports the Insurance Information Institute (I.I.I.).

The average cost for auto insurance nationwide for 2006 is estimated at $867—an increase of $4 per vehicle from last year, according to the I.I.I, despite record vehicle-related losses arising from the 2005 hurricane season. The projected increase represents a continued slowdown from 2005 when auto insurance costs rose by 2.5 percent.

Auto theft is a significant factor that affects rates. According to the Federal Bureau of Investigation (FBI), an automobile is stolen every 26 seconds in the United States. While the number of auto thefts decreased by 1.9 percent in 2004, the first decrease in five years, there were still 1.24 million vehicles reported stolen. The good news is that preliminary FBI data for the first half of 2005 indicate that the auto theft rate fell by 2.1 percent. Declines were posted in every region except the West.

Factors Affecting What People Pay for Auto Insurance
The average driver will pay $867 in 2006. But what an individual driver pays will vary by state, insurance company and motorist characteristics.

Factors that influence the cost of coverage may include:

. Type of car and specific safety features;
. Number of miles driven and type of driving;
. Family claim record, including the number of accidents and their severity;
. Driving record, including speeding tickets;
. Age, gender and experience of driver; and
. Credit-based insurance score.

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