Auto Insurance In Georgia: Why So Expensive?

Auto insurance rates in Georgia have been skyrocketing, with the average cost of full coverage car insurance rising 26% in just one year. This is due to a combination of factors, including the high cost of car repairs, unlimited premium increases, and a high risk of weather events and vehicle theft. Georgia's insurance rates are also impacted by the state's dangerous and busy roadways, lack of premium regulation, and high healthcare costs. The state's insurance commissioner has some influence over rate increases, but insurance companies are primarily responsible for setting premiums. As a result, Georgia residents pay approximately $4,689 per year for full coverage car insurance, which is higher than the national average.

High repair costs

Auto repairs are a significant factor in the high cost of car insurance in Georgia. The cost of repairing vehicles has been increasing across the United States, with the consumer price index for auto repairs and maintenance increasing by 21.4% between 2019 and 2022, according to the U.S. Bureau of Labor Statistics. This rise in repair costs is reflected in Georgia, where repairs are particularly expensive.

In 2021, Georgia was ranked as one of the top five states with the highest car repair costs in the country, with an average repair cost of $407.71. This high average repair cost is due in part to the high cost of parts, with repairs often requiring costly parts that contain precious metals. For example, the most common repair in Georgia was the replacement of catalytic converters, which are expensive due to the precious metals they contain.

The increasing cost of auto repairs has a direct impact on insurance premiums. When insurance providers pay for repairs after an accident or other insured event, the higher cost of these repairs is passed on to policyholders in the form of higher premiums. This is especially true in Georgia, where insurance companies are not required to seek approval from the state insurance commissioner for rate increases, allowing them to pass on the rising cost of repairs to their customers.

The cost of vehicle repairs in Georgia is also influenced by the age and condition of vehicles in the state. As vehicles age, they require more costly repairs, and proper maintenance is essential to prevent surprise repair bills. The high average repair cost in Georgia may be due in part to a higher proportion of older vehicles or a lack of regular maintenance, leading to more expensive repairs.

Dangerous highways

Georgia's highways are a vital means of getting around, but some are extremely dangerous. The state has a higher rate of road accidents than the national average, and the cost of car insurance in Georgia is higher than the national average. The state's dangerous highways are a significant factor in the high cost of auto insurance in the state.

Interstate 85 (I-85)

I-85 is a busy 180-mile highway that runs northeast to southeast in Georgia. It has a high rate of fatal crashes, averaging about one every two weeks. The Georgia Department of Transportation (GDOT) is working to improve safety on I-85 by widening lanes and adding barriers to help ease congestion.

Interstate 75 (I-75)

I-75 is approximately 300 miles long and experiences some of the heaviest traffic in Georgia. This highway is notorious for a high number of fatal accidents involving tractor-trailers. GDOT is addressing this issue with campaigns to mandate speed regulators on tractor-trailers.

Interstate 20 (I-20)

I-20, a 200-mile-long highway, has also seen a high fatality rate from accidents. In September 2016, a fatal accident involving four tractor-trailers and a pickup truck occurred on this highway. GDOT is working to improve road surface conditions, striping, and signage to enhance 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 highway, and in June 2016, five people died in a single accident. GDOT plans to install 56 miles of barriers to prevent head-on collisions.

Interstate 285 (I-285)

I-285 in Atlanta was deemed the most dangerous interstate in the country in 2013. It has the highest number of fatalities per mile among all interstates in the United States. GDOT is taking measures to improve safety by restriping and resurfacing the highway and running campaigns against impaired and distracted driving.

Moreland Avenue (State Route 42)

A 5-mile stretch of Moreland Avenue, also known as State Route 42, is the deadliest highway section in Georgia. It runs through Atlanta's eastern suburbs and has a high crash rate, with 12 fatal accidents resulting in 13 fatalities. The mix of commercial and residential areas, heavy traffic, multiple intersections, and traffic lights contribute to its danger.

Interstate 20 (I-20) from Exit 71 to Exit 65

A 5-mile section of I-20 within the Atlanta metro area has seen a concerning number of fatal accidents. This stretch of the highway experiences high traffic volume, especially during peak hours, and the presence of multiple merging lanes adds to the challenge of navigating it safely. Distracted driving and speeding further increase the risks.

Interstate 285 (I-285) from Rt. 6 Interchange to Riverdale Rd. Exit

A specific section of I-285, also known as the Perimeter, has consistently ranked among the deadliest in Georgia. This approximately 4.4-mile stretch of the highway runs through DeKalb and Clayton counties, connecting Atlanta's northern and eastern suburbs. It is one of the busiest highways in the state, with heavy traffic and numerous merging lanes, increasing the risk of accidents.

Georgia Highway 85 from I-75 to Springdale Drive

Georgia Highway 85, particularly the section from I-75 to Springdale Drive, is another dangerous stretch of road in the state. It was identified as one of the top five most dangerous roads in the Atlanta metro area by a MoneyGeek study, which examined fatal crashes between 2018 and 2020.

The high fatality rates and accident risks on these highways contribute to the increased cost of auto insurance in Georgia.

No cap on premium increases

Georgia's auto insurance rates are high due to a variety of factors, including the absence of a cap on premium increases. Unlike most other states, Georgia does not require insurers to obtain approval from the state insurance commissioner before raising rates. As a result, insurance companies are free to implement rate hikes as they see fit, and these increases are often applied across the board, affecting all policyholders. While increases above 10% may be reviewed by the commissioner, it is not a requirement, and even smaller increases can add up over time.

The lack of regulation on premium increases in Georgia allows insurers to pass on various costs to policyholders. For example, Georgia has some of the highest healthcare costs in the country, and when someone is treated for injuries related to a car accident, insurance companies have to pay more for those claims. Similarly, auto repairs in Georgia are among the most expensive in the nation, and insurance companies recoup these expenses by increasing premiums.

The absence of a cap on premium increases gives insurers the flexibility to adjust rates without seeking approval from the state insurance commissioner. While this may allow insurers to respond more swiftly to changing conditions, it also means that policyholders can experience significant increases in their premiums over time, even if they haven't changed their policy or filed a claim.

In addition to the impact of healthcare and auto repair costs, Georgia's auto insurance rates are influenced by other factors as well. The state's dangerous and busy roadways contribute to higher rates, as Georgia had the fourth-largest number of fatal auto accidents in the country as of 2021. The high risk of weather events and vehicle theft in Georgia also plays a role in the elevated insurance costs.

Expensive healthcare

Georgia's auto insurance rates are impacted by various factors, including the state's expensive healthcare costs. With some of the most expensive healthcare in the United States, medical bills from car accident injuries result in higher claim payouts for insurance companies. This, in turn, leads to increased car insurance premiums for Georgia residents.

The high cost of healthcare in Georgia is a significant contributor to the overall expense of auto insurance in the state. When individuals are treated for injuries related to car accidents, insurance companies are responsible for covering the medical expenses. As healthcare costs rise, so do the amounts that insurance companies have to pay out, which ultimately results in higher insurance rates for consumers.

In addition to the high cost of healthcare, other factors contributing to the high auto insurance rates in Georgia include the state's dangerous highways, lack of premium regulation, expensive auto repairs, and a relatively high rate of uninsured drivers. The combination of these factors results in Georgia residents paying higher-than-average auto insurance premiums.

To mitigate the financial burden, Georgia residents can explore various cost-saving measures, such as shopping around for the best rates, taking advantage of discounts, bundling policies, and raising their deductibles. By being proactive and comparing offers from different insurance providers, individuals can find more affordable coverage options.

High vehicle theft

Georgia is one of the top five states for vehicle thefts in the US, with 26,238 thefts in 2022. This high rate of car theft is a significant factor in the state's high insurance premiums.

The cost of vehicle theft in the US was estimated at $4.3 billion in 2012. With such high losses, it is no surprise that vehicle theft has become a focus for state authorities. In Georgia, law enforcement has been collaborating with federal authorities to target the "chop shop" industry, one of the main drivers of motor vehicle theft.

Stealing a motor vehicle in Georgia falls under the state's "theft by taking" law, which makes it a crime to unlawfully take another's property with the intent to deprive the owner of that property. The penalties for vehicle theft in Georgia depend on the value of the vehicle. If the vehicle is worth $1,500 or less, the person commits a misdemeanour, punishable by 12 months in jail. If the vehicle is worth more than $25,000, the person commits a felony, punishable by two to 20 years in prison.

The crime of "joyriding" can also be punished under the "theft by taking" statute. Even if a person intends to return the car or ditch it somewhere, it is still considered theft under Georgia law. The same penalties apply as for vehicle theft.

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