April 6, 2011

State Insurance Commissions And Their Role In Setting Auto Insurance Rates

Any driver who takes the time to look at auto insurance rates online will quickly notice that the cost of auto insurance coverage can rise from one state to the next. Part of this is due to statistics; there may be a greater incidence of car theft in California than Wisconsin, for instance, which would increase the cost of comprehensive coverage in California. Location affects statistics significantly, but it's not the only factor when it comes to the varying rates from state to state. State law and the actions of the insurance commissioners that enforce these laws can also be a very important issue.

The more regulations that an auto insurance company has to deal with, the more they'll have to charge their customers in order to make a profit. Unfortunately, this means that effective state insurance commissions actually increase the auto insurance rates in their states. Insurance commissioners necessarily impact the way that insurance companies do business. That's not to say that a lack of enforceable insurance law would be a good thing - many of the actions of state insurance commissions are designed to protect the auto insurance coverage of buyers and add a tremendous amount of value to a policy. Auto insurance commissions give drivers recourse if their policy claims are unfairly denied, for instance, and they prevent predatory insurance companies from operating.

Drivers should know how their state insurance law operates and what their rights are when looking for auto insurance rates. This becomes especially important if a driver finds an insurance provider that is charging its customers unfairly or denying policy coverage for little or no reason. In these instances, making an official complaint to a state insurance commissioner can help to keep an insurance company fair and improves the overall landscape of auto insurance in a state. What's more, such a report can help a driver find justice, which can be extremely important if a claim has been denied or if a driver is otherwise in danger of losing money thanks to the actions of an unscrupulous insurance provider.

Ultimately, state insurance commissions are an incredibly part of car insurance. They're a last line of defense for car insurance customers and they prevent insurance companies from taking unfair advantage of their customers. However, it's also important to note that their actions affect the cost of insurance. Auto insurance rates rise in states with extremely active, powerful insurance commissions, particularly when state insurance law is very restrictive. States with powerful insurance commissions and reasonable insurance laws probably offer the best value for their drivers and the fairest possible system for both insurance companies and their policy holders.