Auto Insurance Costs Dropped Slightly in December

December showed the first month-to-month drop in the average cost of vehicle insurance for 2010, according to the Bureau of Labor Statistics (BLS).

Chart showing average costs of coverage for 2010

Click graph to enlarge

The latest Consumer Price Index (CPI) report from the BLS showed that the price of coverage dropped 0.3 percent in December.

Using the National Association of Insurance Commissioner’s estimated average expenditure for coverage and subsequent CPI reports, the average cost of coverage in the United States is now approximately $887.

According to CPI reports, the price of car coverage rose a total of 3.8 percent in 2010.

About the Motor Vehicle Insurance Consumer Price Index (CPI)

Every month, the (BLS) publishes an update of its CPI, which is meant to track and give data on the price changes of consumer goods over time. The CPI data referenced by Online Auto Insurance News are representative of changes in the cost of coverage for an estimated 87 percent of the U.S. population.

The BLS collects its motor vehicle insurance data from a sample of insurers from each of the 87 pricing areas used in the CPI. Prices of coverage are ascertained by looking at a sample of 768 individual private passenger policies or quotes. The CPI actually tracks the prices of these policies over time, and price changes due to fluctuations in insurer premium-calculation formulas are reflected in the CPI data, as are changes caused by increases in state-mandated minimums for car insurance coverage.

According to the BLS, “The major types of coverage included are collision, comprehensive, bodily injury liability, property damage liability, medical payments, uninsured motorist and personal injury protection.”

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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