The insurance
industry is made
up of two
distinct
segments:
life/health and
property/casualty.
Property/casualty
insurers provide
insurance for
cars, homes and
businesses.
Property/casualty
insurance can be
divided into
commercial and
personal lines
types of
insurance.
Commercial lines
include the
kinds of
insurance
businesses
purchase.
Personal lines,
as the term
suggests,
includes
coverage for
individuals --
auto and
homeowners
insurance.
Private
passenger auto (PPA)
is a term
applied to
non-business
related auto
insurance. In
the chart above,
it is broken out
into two parts:
liability and
physical damage.
Liability covers
policyholders
for the harm
they are legally
responsible for
in a crash such
as injuries to a
pedestrian or to
occupants of the
other car and
damage to that
car. In most
states, drivers
must have auto
liability
insurance before
they can legally
drive a car.
Physical damage,
which is not
mandatory,
covers
policyholders
for damage to or
theft of their
own vehicle.
Premiums can be
accounted for in
several ways.
The charts on
premiums use
direct premiums
written (DPW),
which reflect
premium amounts
before
deductions for
reinsurance
transactions.
(Reinsurance is
insurance for
insurance
companies.)
Premiums may
also be
expressed as net
premiums
written, or
after deductions
for reinsurance.
The bar chart
above shows
premiums for the
two different
auto insurance
coverage –
liability and
physical damage
– for a ten-year
period. The
increase in
premiums each
year represents
both increases
in the number
and value of
cars on the road
and the cost of
auto accidents,
which includes
the cost of
repairing and
replacing
damaged
vehicles,
medical care for
the injured and
jury awards.
The
auto insurance
liability part
of the policy
covers two
aspects of a
drivers’
liability to
others involved
in an accident
they caused:
bodily injury
liability and
physical damage
liability.
Bodily injury
liability pays
for the medical
costs of other
people injured
as a result of
the accident and
the
policyholder’s
legal defense
costs in the
event that those
harmed sue for
damages. It also
pays noneconomic
losses, such as
pain and
suffering
awards, to those
injured. The
chart above
shows growth
rates from the
previous year in
the frequency of
bodily injury
claims and the
severity, or
amount, of
bodily injury
claims for a
ten-year period.
.
Drivers are
filing fewer
bodily injury
claims, in part
because today’s
highways and
cars are safer.
Drivers are less
likely to have
an accident and,
when they do,
cars better
protect the
occupants from
injury so some
people may walk
away unharmed.
But the claims
that are filed
cost more. Court
awards and the
cost of medical
care continue to
rise, pushing up
the dollar
amount of the
average bodily
injury claim.
Physical damage
liability pays
for the cost of
repairing or
replacing the
vehicle or
vehicles damaged
in an accident.
The chart above
shows rates of
growth in the
frequency and
severity, or
amount, of
physical damage
liability claims
for a four-year
period.
Drivers are
filing fewer
physical damage
liability claims
but, as with
bodily injury
claims, the cost
of each physical
damage claim is
rising. New cars
have more
electronic
features and
more airbags,
both of which
are costly to
replace.
The chart above
shows the
average amount
spent for auto
insurance. It
assumes that all
vehicles carry
liability
coverage but not
necessarily
collision
insurance, which
pays for damage
to the
policyholder’s
car in a crash,
or comprehensive
insurance, which
covers losses
other than those
caused by a
crash, such as
theft or water
damage.
Travelers,
Allstate, Encompass, Deerbrook,
Metropolitan, Cumberland Mutual, Allied, AIG Friends Cove
Mutual, Progressive, Harleysville, Safeco,
General Casualty, Foremost,ZurichHartford, Commercial
Protective, Truckers, Hartford, USG, Bristol
West, Philadelphia Ins Co.Auto Insurance,
Homeowners Insurance, RV Insurance, Motorcycle
Insurance, Life InsurancePowersports
Insurance, Business Insurance, Commercial
Vehicle Insurance, Truck InsuranceAccident
Insurance, Disability Insurance, Health
Insurance, Flood Insurance, Aircraft Insurance
