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Nathan Ackerman Car Insurance Rates 800 Fifth Avenue, Suite 4100 Seattle WA, 98104 (888) 426-1093 |
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Carriers that partner with Car Insurance Rates have hinted that premiums may rise on smaller vehicles due to the increasing cost of replacement parts, which drives up insurers’ loss claims ratios.
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Online PR News – 01-August-2011 –CarInsuranceRates.com, a site that networks with most major auto insurance providers to provide no-cost quotes on coverage to visitors, announced today that many of its insurers are toying with the idea of car insurance rate hikes for the owners of smaller vehicles. The contemplated premium increase is the result of booming demand for smaller cars, which has also driven up the cost of replacement parts.
“Our insurers have their fingers on the pulse of the industry and usually communicate to us what is on the horizon for consumers. Right now, gas prices are driving demand for compact vehicles, which is good for consumers in that it has led to lower prices for smaller cars. However, on the insurance end of things, the cost of replacement parts for these vehicles has subsequently exploded, thereby directly impacting carriers’ bottom lines,” said Nathan Ackerman, spokesman for CIRS.
The erosion of auto insurers’ profitability stems from burgeoning loss-claims ratios, which is the ratio between a vehicle’s price and its component parts. The vehicles themselves have gotten cheaper, but their parts have become more expensive. In fact, many insurers report current loss-claims ratios of 80 percent, compared to 50 percent roughly three years ago.
“Higher loss-claims ratios for insurers historically have meant higher premiums for policyholders, and we want our visitors to be prepared for the change if it indeed plays out that way. For that reason, we are making this insider news public. We hope the trend will also help our visitors make more informed decisions about what vehicle they should purchase next in light of the possibility of higher premiums in the compact segment,” said Mr. Ackerman.
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