Georgia Auto Insurance: Why So Expensive?

Car insurance in Georgia is expensive due to several factors, including the state's legislation, the cost of repairs and healthcare, dangerous highways, and the high risk of weather events and vehicle theft. The average cost of car insurance in Georgia is $1,638 per year, placing the state among the top 10 most expensive for auto insurance in the US.

In 2008, the Georgia Senate Bill 276 allowed insurance providers to increase premiums without the approval of the state insurance commissioner. This legislation has contributed to the high cost of car insurance in the state. Additionally, Georgia has busy and dangerous roadways, with a high number of fatal accidents and traffic, leading to more claims and increased rates for all drivers.

The cost of auto repairs and healthcare in Georgia is also a factor. Repairs are often expensive due to the advanced technology in modern vehicles, and insurance companies pass these costs on to policyholders. Georgia also has some of the highest healthcare costs in the country, which results in higher insurance premiums.

Furthermore, the state experiences severe weather events like storms, droughts, and hurricanes, leading to substantial damage to vehicles and higher insurance claims. The high risk of vehicle theft in Georgia, with the state ranking in the top five for vehicle thefts, also contributes to the elevated insurance rates.

Other factors that impact insurance rates in Georgia include age, location, driving record, credit score, vehicle type, and insurance coverage.

High auto repair costs

Georgia is among the top 10 states with the highest auto repair costs in the US. The average repair cost in Georgia is $407.71, with an average labour cost of $145.34 and an average parts cost of $262.37.

The cost of repairing a car is influenced by several factors, including vehicle year, make and model, repair difficulty, and parts cost. The age of a car is also a factor, as older cars are more likely to need costly repairs.

In Georgia, the most common car repair in 2021 was the replacement of catalytic converters, which cost around $1,342 on average. The high cost of this repair is due to the precious metals used in catalytic converters, which are essential parts that reduce harmful emissions from vehicles.

Additionally, the cost of living in Georgia, which is the 12th lowest in the US, also contributes to high auto repair costs. While mechanic wages are the second-lowest in the country, the high cost of living means that labour and parts are more expensive relative to income.

Furthermore, the type of vehicle, road conditions, and weather can also impact repair costs. For example, frequent stops and starts in large cities like Atlanta can result in higher brake repair costs. Extreme weather, such as snow in Denver, Colorado, can also increase the need for repairs.

To mitigate the financial burden of high auto repair costs in Georgia, it is recommended to consider extended warranty protection or budget-friendly insurance plans that cover repairs due to accidents or weather-related damage.

High healthcare costs

Georgia has some of the most expensive healthcare costs in the United States. When someone is treated for an injury related to a car accident, these high healthcare costs mean the car insurance company pays more for claims. The more auto insurance companies pay per claim, the more likely Georgia drivers will see rate increases.

Healthcare costs are not the only factor that makes car insurance in Georgia expensive. The state has dangerous and busy roadways, and in 2021, Georgia had the fourth-largest number of fatal auto accidents in the country. The state is also part of the South-Atlantic region, where vehicle miles travelled were 14.2% higher in June 2021 than in June 2020. More fatal accidents and traffic mean more claims are paid out, and insurance companies tend to increase rates for all drivers in the area to recoup their losses.

Another factor contributing to high car insurance costs in Georgia is the lack of premium regulation. In most states, insurers must get approval from the state insurance commissioner before increasing car insurance rates, but not in Georgia. Unless rate increases are higher than 10%, they may not be reviewed by the commissioner. As a result, rate hikes are applied across the board, and everyone pays more for their premiums, even if they haven't changed their policy or filed a claim.

In addition to high healthcare costs, Georgia also has expensive auto repairs, which is another factor that contributes to the high cost of car insurance in the state. Depending on the type of accident, a single claim could pay out repairs for multiple cars, further increasing rates.

Dangerous highways

Georgia's auto insurance rates are influenced by the state's dangerous highways, which contribute to a high number of accidents and fatalities. Here is a closer look at some of Georgia's most hazardous roads and their impact on insurance costs:

Interstate 75 (I-75)

I-75 is approximately 300 miles long and is known for its heavy traffic and high number of fatal accidents, particularly those involving tractor-trailers. The high accident rate on this highway contributes to increased insurance claims and subsequent rate hikes for Georgia drivers.

Interstate 20 (I-20)

I-20, stretching 200 miles, was named the most deadly interstate in Georgia in 2018. It has a high fatality rate and has witnessed gruesome accidents, including a 2016 collision involving four tractor-trailers and a pickup truck. The Georgia Department of Transportation (GDOT) is working to address road surface, striping, and signage issues to improve safety.

Interstate 16 (I-16)

I-16, connecting Savannah and Macon, is considered one of Georgia's deadliest highways. In 2015, there were 28 fatalities on this 166-mile stretch of road. GDOT installed barriers along I-16 to prevent vehicles from crossing lanes and colliding with oncoming traffic, aiming to reduce accidents and improve safety.

Interstate 85 (I-85)

I-85 is a busy 180-mile highway with fatal crashes occurring about once every two weeks. The high accident rate on this highway is a factor in Georgia's costly auto insurance. GDOT is taking measures to improve safety by widening lanes and adding barriers to ease congestion.

Interstate 285 (I-285)

I-285, a 64-mile interstate circling Atlanta, was deemed the most dangerous highway in the country in 2013. It sees more fatalities per mile than any other interstate in the US. GDOT is working to enhance safety by restriping and resurfacing the highway and running campaigns against impaired and distracted driving.

In addition to these highways, a 2022 study by MoneyGeek identified Georgia Highway 85 and several other roads in the Atlanta metro area as having high fatality rates. These dangerous highways contribute to Georgia's high auto insurance rates, as insurance companies factor in the increased risk when setting premiums.

Lack of premium regulation

Georgia's auto insurance rates are influenced by a variety of factors, including the state's lack of premium regulation. This means that insurance companies can increase their premiums without the approval of the insurance commissioner, resulting in higher rates for consumers. This lack of regulation allows insurance companies to pass on various costs to policyholders, such as expensive healthcare and auto repair costs.

In most states, insurance providers must obtain approval from the state insurance commissioner before raising rates. However, in Georgia, there is no cap on premium increases, and rate hikes are applied across the board. This means that even if a driver hasn't changed their policy or filed a claim, they may still experience higher premiums.

The lack of premium regulation in Georgia contributes to the state's high auto insurance costs. Insurance companies are free to increase rates without oversight, passing on various expenses to consumers. This lack of regulation, coupled with other factors such as dangerous highways and high healthcare costs, makes auto insurance in Georgia one of the most expensive in the nation.

Georgia's auto insurance rates have been increasing over the years, and the lack of premium regulation plays a significant role in this trend. Without any restrictions on premium increases, insurance companies have the freedom to raise rates as they see fit, ultimately impacting the affordability of auto insurance for Georgia residents.

It's important to note that while shopping around and comparing quotes can help Georgia residents find more affordable options, the underlying issue of lack of premium regulation remains a challenge for the state's drivers. This issue highlights the importance of effective insurance regulations in protecting consumers from excessive rate hikes and ensuring the accessibility of essential services like auto insurance.

Uninsured drivers

Georgia has a relatively high rate of uninsured drivers, with around 12% of drivers lacking insurance. This is not the worst rate in the nation, but it is still considered dangerously high. In the event of an accident, uninsured drivers may not be able to cover the costs of damage or medical bills.

Uninsured motorist coverage is not legally required in Georgia, but it is highly recommended due to the high accident rates and the number of uninsured drivers in the state. This type of coverage will protect you if you are in an accident caused by an uninsured driver, or if their insurance cannot cover the full cost of your damages. It can also cover damages caused by a hit-and-run.

The cost of adding uninsured motorist coverage to your policy is relatively low, typically ranging from $50 to $150 per year, or $4 to $13 per month.

It is important to note that Georgia law requires insurance companies to offer uninsured motorist coverage, but it is not mandatory for drivers to carry it. However, given the potential financial risks, it is advisable for drivers to consider adding this coverage to their policy.

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