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Big Differences in Insurance Rates Can Yield Significant Savings for Consumers

3 August 1999

Big Differences in Auto Insurance Rates Can Yield Significant Savings for Consumers Who Shop Around, National Study Reveals

    MAYFIELD VILLAGE, Ohio, Aug. 3 -- U.S. drivers could be
saving an average of $481 every six months on auto insurance if they took the
time to compare rates, but most drivers don't shop around for auto insurance
on a regular basis, according to information released by Progressive Auto
Insurance.
    The findings, which focus on auto insurance rate variance -- or the
average spread between the highest and lowest six-month rates available to
drivers for new policies -- are based on rate information provided to nearly
700,000 consumers, living in 46 states and the District of Columbia, who
called Progressive between March 1, 1998 and March 31, 1999.  Each consumer
received comparison rates for Progressive and up to three other leading auto
insurers in their market.  Rate information was obtained from public filings
with each state's department of insurance.
    Specifically, six-month rates varied an average of $481 across the
country.  That means the same driver could receive a quote of $1,256 for a
six-month auto insurance policy from one company, and a quote of $775 for the
identical policy from another company.
    On a state-by-state basis, average six-month rates varied more than $500
in 13 states -- Arizona, California, Delaware, Illinois, Kentucky, Louisiana,
Maryland, Minnesota, Nevada, Oklahoma, Oregon, Tennessee and Texas -- and in
the District of Columbia.
    The most dramatic variances were in Kentucky and Texas.  The average six-
month variance in Kentucky, based on calculations for more than 13,000
consumers in that state, was $711.  In Texas, the average six-month variance
was $705, based on calculations for 64,000 Texans.  The study also found that
rates varied least in New York and Vermont, where average six-month variances
were $192 and $210 respectively.
    The chart below shows savings available in major U.S. markets, based on
the average rate variances in each:

                           Average Six-Month
                             Rate Variance

    National Average             $ 481

    Baltimore                    $ 764
    Houston                      $ 838
    Dallas/Ft. Worth             $ 722
    Chicago                      $ 634
    Philadelphia                 $ 595
    Los Angeles                  $ 616
    Washington, D.C.             $ 587
    Miami                        $ 555
    San Francisco                $ 514
    Atlanta                      $ 454
    Detroit                      $ 469
    New York City                $ 241

    Many drivers unaware of variances because they don't shop around
    In a separate study, Progressive commissioned Millward Brown, a national
research firm, to conduct interviews with 1,800 drivers during November 1998.
The results revealed that the majority of drivers are unaware of how
extensively rates vary.  In fact, 65 percent of those polled thought that
comparable auto insurance policies would vary by no more than $250 in a six-
month period.  Furthermore, almost 60 percent of consumers surveyed had not
contacted an insurance company or agent to obtain rate information in more
than two years.
    Ralph Nader, well-known consumer advocate, commented on the findings,
"It's surprising that so few people take the time to shop around when the
premium varies so greatly between companies.  Clearly, consumers need to be
aware of these differences and they need to shop around to make sure they are
getting the best value for their auto insurance dollar."
    "Nationally, the auto insurance market is very competitive with more than
300 companies offering coverage in any given market," said Moira Lardakis,
Progressive division president.  "Because no single insurance company will
always offer the lowest rates for everyone, the best way to manage auto
insurance costs is to shop around for the best combination of rates and
service.  Consumers can't benefit from the competitive market unless they shop
around."
    Shopping for insurance is easy, according to Lardakis.  Innovations in
technology and service now offer consumers several options for shopping to
find the best combination of rate and service.  For example, Progressive
offers free comparative rates and shopping services 24 hours a day by phone
and on the Internet at progressive.com .
    Independent insurance agents are another valuable source of auto insurance
information.  Many consumers prefer to work with independent agents, who
typically represent multiple insurance companies, because they can shop around
on behalf of a consumer and provide in-person service.
    Local listings of agents can be found in the Yellow Pages, or by using the
"Find an Agent" function on Progressive's Web site, progressive.com .
    Progressive Insurance , headquartered in Mayfield Village,
Ohio, is one of the nation's largest auto insurers.  In business since 1937,
the company provides all drivers with competitive rates and innovative
services designed to make it easy to shop for, buy, and own their insurance
policies.  Progressive provides policyholders with 24-hour services over the
phone, the Internet, and through more than 30,000 Independent Insurance Agents
throughout the United States and in Canada.  Progressive companies writing
auto insurance consistently receive high ratings from A.M. Best Company, an
independent firm that rates the financial strength and performance of auto
insurers, assuring consumers of the relative strength and stability of the
insurer.  More information about Progressive can be found on the company's Web
site, located at progressive.com .