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West Virginia feels the pain from higher car insurance rates

(Capitol Notes - Graphic Illustration/MetroCreative)

CHARLESTON — Drivers in West Virginia are not immune to a national trend of higher car insurance premiums, with state officials and insurance experts placing the blame on multiple factors.

According to new Consumer Price Index (CPI) data released in March, the index for motor vehicle insurance increased by nearly 1% between January and February and increased by more than 20% over a 12-month period between March 2023 and February 2024.

Increases in the index for car insurance, shelter, airline fares, apparel, and recreation contributed to a 1% increase in inflation, from 3.1% in February 2023 to 3.2% in February 2024.

Some insurance companies have cited new laws that have gone into effect in West Virginia for increases in premiums and rates. West Virginia Insurance Commissioner Allan McVey said that new laws or rules are not responsible for some of the premiums and rates that West Virginia residents are seeing.

“Unfortunately, we are seeing rate increase filings due to continued inflation and supply chain issues which have caused the cost of claims to increase,” McVey said in an email Wednesday. “This phenomenon is occurring throughout the whole country.”

According to CPI data, vehicle repair costs have increased by 6.7% over the same 12-month time period, with the cost of parts increasing and the time to receive those parts also increasing.

Some have also cited an increase in car accidents in the state and region. But McVey said while West Virginians are seeing higher rates in part because of increases in claims, West Virginia is seeing much lower increases than other states.

“Quite frankly our loss experience here in WV has been relatively stable and, for that reason, we are seeing lower increases than a number of other states,” McVey said.

According to McVey, all rate increases or decreases must be filed with the state Office of the Insurance Commissioner (OIC). State Code requires the office to seek public comment on any rate increase above 15%.

“All filings go through a rigorous review process and are either approved, rejected or modified based on all information provided,” McVey said. “This also includes an actuarial review to verify justification in the decision we make.”

The OIC is in the middle of conducting an annual survey of car insurance rates. State Code requires the OIC to compile this data every year from insurers based on the West Virginia basic mandatory automobile coverage limits. Responses are due by Friday, April 19.

Mandatory minimum limits in West Virginia include $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $25,000 for property damage liability per event.

According to the 2023 survey, there were 95 licensed insurance companies that reported personal auto insurance direct written premiums in West Virginia. However, State Farm Mutual Auto Insurance accounted for more than 26% of the total insurance market in the state, with Erie Insurance accounting for more than 15%.

Rates in West Virginia also vary by region. The statewide average annual rate for a 48-year-old married woman in 2023 was $693. According to the report, rates rose by 8.6% from the 2022 statewide annual average of $638.

Annual rates in the Martinsburg, Morgantown, Clarksburg, Wheeling, and Parkersburg regions were all below the statewide average, with Martinsburg being more than 10% below the average with an average annual rate of $621. But the Bluefield, Charleston, Beckley, Huntington, and Williamson regions all had annual rates above the statewide average, with Williamson more than 14% above the average with $795.

“The best explanation for this large rate disparity is that losses have generally and historically tended to be higher in the Williamson area as opposed to those in the other comparison cities, and losses in the Martinsburg area for this type of risk are trending lower,” according to the 2023 report. “Based on demographics, the higher premium rates apply in southern West Virginia cities while lower rates apply to central or northern West Virginia cities.”

“This is something we are dealing with on a daily basis here in our office and believe me, we are doing the best we can for all our consumers here in West Virginia,” McVey said.

Steven Allen Adams can be reached at sadams@newsandsentinel.com

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