Insurance costs and wages in Alaska
The insurance industry conducted a study recently which reveals a widening gap between insurance costs and wage increases. This problem led Vice President Joe Biden to address the National Association of Insurance Commissioners (NAIC) in a meeting which was conducted to manage and alleviate the problem of premium rate reviews. Commissioners all across the nation were allocated with additional powers so that they could maintain a better control over the premium hikes.
Purchasing insurance is not always a cheap affair. Online auto insurance quotes provide a good starting point for Alaska residents to look for affordable auto insurance but the state itself sets very high limits for bodily injury and property damage. This has created a controversy which has made the headlines within the insurance community of Alaska.
The National Economic Council (NEC) recently published a report which clearly showed that policy holders in Alaska are among one of the states witnessing the biggest gap between premium rate increase and wage hikes. Auto insurance quotes and paychecks have started showing a heavy difference. Independent auto insurance analysts have also stated that the rising cost of insurance is also in turn deterring potential policy holders from buying insurance coverage and existing policy holders refuse to renew their policy. The analysts attribute this problem solely to the difference between premium amount and the paycheck.
A statistical research conducted by NEC to find out the root of the problem came up with some interesting and frightening facts. Alaska witnessed the average premium rate go up by 145% in the last 10 years while wages went up by 35% within the same period. Florida also faces the same problem but at a milder degree. Insurance rates in Florida went up by 121% although the average paycheck value has gone up by 43%. Michigan is also suffering from the same problem.
Government regulators are proposing that a drastic review and change should be implemented as soon as possible to tackle the problem. Major changes and policy reforms need to be introduced so that insurance buyers are better equipped to negotiate successfully with insurance carriers. The reform plan would help reconcile auto insurance quotes and rates resulting in lower premiums so that coverage becomes more affordable.
Insurance as a product is subject to continuous change and revision. This is mainly because the factors which dictate its nature, like laws and risk statistics, keep changing continuously. The number of vehicles registered in Alaska stand at 932,441 according to the research and statistics department of the Alaska DMV.
Compare the figures to the motor vehicle crash report and you will clearly see how necessary insurance is. More than 33% of vehicles are uninsured in Alaska. Roughly 20% of all auto accidents and fatalities are caused by uninsured drivers. The statistics pushed the state government into introducing very stringent auto insurance laws. Alaska state authorities require drivers to carry a copy of their policy or insurance ID card in their car at all times. Alaska also sets very high limits for personal and property coverage.
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