Auto Premiums Drop, So Take Another Look

Memorial Day weekend marks the official start of the summer driving season -- time to get your car serviced if you want to wring every last mile per gallon out of the family SUV. It could also be a good time to shop around for automobile insurance, as rates are coming down a bit.

As a group, the property and casualty industry -- which, in addition to autos, also insures houses and other kinds of personal property -- delivered strong financial results for 2006, thanks to one of the mildest hurricane seasons in years. Insured catastrophe losses fell to approximately $8 billion from roughly $62 billion in 2005.

While this year's hurricane season is expected to be much more active, auto insurers still seem poised to pass along at least some of last year's savings. The softening in premiums hasn't been as widespread as some might have predicted; insurers are cutting rates where necessary, rather than making an aggressive play to gain market share, as they have in the past.

But companies are really focused on the risk factors each customer presents. That means you may benefit by having a clean driving record with no recent moving violations or accidents on your record.

Many factors have contributed to making the automobile line of business more profitable. Firstly, vehicles are safer now than they were 10 years ago. Many models come standard with side-impact airbags and other safety features that make you less likely to be seriously injured in an accident. Secondly, stricter driving-under-the-influence laws and enforcement are starting to show up in lower loss costs for carriers.