Best and Worst Cities for Car Insurance

There's good news and bad news about auto insurance for 2005.

The good news: The insurance industry projects a 1.5 percent increase in average annual insurance expenses nationwide, which is the smallest increase in five years, according to the Insurance Information Institute.

The bad news: Drivers in many cities will pay much, much more than the national average of $870. The insurance industry’s information is based on the average annual expenditures that drivers across the country make for auto insurance. Note that the $870 figure is derived from coverages on all kinds of vehicles (new and old) as well on all kinds of drivers (young and older) and in various locales (cities and rural areas). In addition, it does not equal the sum of liability, collision and comprehensive expenditures because not all policyholders purchase all three coverages.

But a study comparing insurance costs in large and small cities found drivers in Detroit could pay nearly six times the average this year, or $5,162 in annual insurance premiums. The annual survey by Runzheimer International, a vehicle costing consulting firm based in Rochester, Wis., was not based on actual insurance expenditures. For comparison purposes, all Runzheimer estimates were for the same midsize sedan, such as a Chevrolet Malibu, that's driven in a 50-mile radius of the city by a hypothetical male or female driver who is over the minimum driving age and has a clean driving record. The insurance premiums calculated include coverage for collision, comprehensive, bodily injury, property damage and uninsured motorist coverage.

According to this Runzheimer study, drivers in Philadelphia, Newark, N.J., Los Angeles and New York City also face high annual car insurance payments.

Meanwhile, some smaller cities in the South and Midwest were ranked as having the lowest insurance rates. Runzheimer said annual premiums for the insurance coverage specified in the study could be the lowest at $758 in Roanoke, Va., while those in Wapakoneta, Ohio, were projected a bit higher, at $871.

The insurance institute attributed the overall low rate of increase in insurance expense in 2005 to safer cars, fewer car crashes, fraud-fighting efforts and new anti-theft technology.

But between 35 percent and 50 percent of stolen vehicles never are recovered, according to car theft studies. The most popular stolen vehicles recently have been Honda Civics, Accords and Toyota Camrys. Fridays and Saturdays are the most popular days for car thefts, and Mondays and Tuesdays have the highest theft recovery rates, the insurance group said.

And Robert Hartwig, senior vice president and chief economist for the nonprofit group, said rising medical costs and auto repair costs as well as jury awards remain problems. The typical medical bill for a car crash ranges from $6,000 to $9,000 but can extend into the tens of thousands, the institute said.

"Unfortunately, while drivers today are filing fewer claims, those that are filed cost more," Hartwig said. "It costs more to repair cars, particularly following accidents involving sport-utility vehicles."

The institute said several factors, including the state a driver is in, affect the price of auto insurance. Other factors are:

• Type of car insured

• Safety features on the car

• Amount of miles driven and type of miles

• Driving record

• Family claim record, including the number of crashes and their severity

• Age, gender and experience of the driver

• Credit-based insurance score

Here's the Runzheimer list of the five most expensive cities for auto insurance premiums

Detroit, $5,162
Philadelphia, $4,142
Newark, N.J., $3,482
Los Angeles, $3,225
New York City, $3,127

Runzheimer's list of the five least expensive cities for auto insurance premiums:

Roanoke, Va., $758
Wapakoneta, Ohio, $871
Chattanooga, Tenn., $911
Green Bay, Wis., $948
Raleigh, N.C., $949

Now you know how much your parents pay for your ability to drive.  At least your not flipping the bill!