When your car insurance premium increases, how much is too much?
The average premium on the average auto policy in the United States is now $2,500, up 10% from a year ago, according to a survey released Wednesday by the National Association of Insurance Commissioners.
But it may be more expensive to insure than it used to be, according a survey of more than 800,000 Americans conducted by the Insurance Information Institute, an industry group.
More than half the respondents said they were paying too much, with some paying more than $5,000 a year.
The average price for a family policy that includes collision coverage increased about 25% to $1,764 from $1.734 a year earlier, the survey found.
The median monthly premium for policies in the second-tier policies was $1 and the average was $2.70.
The survey of about 7,000 consumers, conducted between May 23 and June 2, also found that many drivers are paying a lot more than they used to, with the average annual cost of an auto insurance policy rising by nearly $4,500.
The price of auto insurance in the U.S. has also been increasing rapidly in recent years.
In 2014, it was $12,738.
By 2016, the average cost of auto coverage was $14,838, according the survey.
But premiums have been climbing for decades.
According to the National Automobile Dealers Association, auto insurance costs are on the rise nationwide, and many insurers are raising premiums to make up for declining sales.
“It’s very difficult to raise prices without hurting consumers,” said Michael D. Mancuso, the association’s president.
“When the average car is sold at $30,000 or $35,000, the auto insurance industry makes a lot of money,” he said.
The National Association for Car Insurance and the Insurance Institute for Highway Safety also said premiums are at record levels and that a lot is riding on the continued growth of the market.
Some analysts said the rising costs could lead to some drivers becoming even more wary about purchasing insurance and will have an impact on their finances.
“If we don’t see the industry growing, I would not be surprised if there’s a decrease in the rate of consumer protection,” said Andrew Fieger, an associate professor at Northeastern University.
“You are going to see more people going with an insurance policy in 2017 and 2018 and more people opting out.”
But some experts are warning against that.
“The industry is going to get bigger,” said Tom M. O’Donnell, an analyst at BMO Capital Markets.
“People are going out and trying to get into the industry as fast as they can.”
And if drivers are hesitant, insurance companies may have to increase their prices.
In a recent study, insurers charged an average of $1 per month on average for the coverage in the most expensive policy, the AAA, which is for the most popular vehicle models, according