Looking at insurance premium data reveals a lot.
If a location is seeing an increase in insurance premium volume, it could be a sign of economic development as new homeowners and businesses require policies.
It could also be an indication of underlying issues. For example, a place prone to flooding, like Louisiana, may see more expensive premiums. Another example would be Georgia, where the most accident-prone highways have led to a spike in auto insurance costs.
That's why we've decided to analyze state-by-state insurance premium data sourced from the Insurance Information Institute (III) to tell you which states and their residents have seen the biggest increases in insurance premium costs over the last decade.
In this report, you'll find the following:
- States that have seen the biggest increases in insurance premiums per capita over the last decade (2010 to 2020)
- States that have seen the biggest increases in insurance premium taxes collected per capita over the last decade
- Changes in insurance premiums per capita by state by line over the last decade
The methodology
Getting started with the methodology will help clarify the data you're about to see.
All data derives from the Insurance Information Institute, which pulled its data from the National Association of Insurance Commissioners (NAIC). Breeze analyzed insurance premium data from 2010, 2019, and 2020 to find both year-over-year and decade-long trends.
The tables below referring to direct premiums written represent premium amounts before reinsurance transactions. It also only represents property and casualty insurance (P&C) and does not include life/annuity or health insurance. For example, insurance products like voluntary life insurance are not included in the data analysis.
The P&C data includes both personal lines, like auto or homeowners coverage for individuals, and commercial lines, like products designed for businesses. For example, insurance for small business owners, like workers comp or professional liability insurance, is included in the analysis.
The table referring to taxes represents state taxes paid by insurance companies based on their premiums in those states. This data includes P&C insurance, as well as life/annuity, and health insurance, which is one of the most common and best employee benefits.
All table data was normalized by taking each state's population into account. This meant taking a state's annual premium or premium tax data from a given year and dividing it by the same state's total population from that same year to develop both a premium per capita and a premium tax per capita figure. This puts all states on a level playing field, rather than favoring larger states with bigger economies like California, New York, and Texas.
For example, New Jersey's insurance premium data in 2010 was divided by its population in 2010, while its 2020 insurance premium data was divided by its population projection in 2019 as 2020 figures are not yet published. 2019 population figures were used for both 2019 and 2020. Population numbers were pulled from the U.S. Census Bureau.
To find year-over-year or decade trends, a percent increase calculation was conducted to find changes in either the premium per capita or premium tax per capita figure.
If you'd like to see an Excel file of the data or have any questions, please email me at [email protected].
From 2010 to 2020, insurance premiums have risen the most in these states
First, a look at which states have seen the biggest increases in insurance premiums per capita over the last decade.
The data here refers to direct P&C insurance premiums written (before reinsurance) in a given year in a given state. Each state's population for the corresponding year was accounted for to give a per capita figure.
The table ranks states according to the biggest decade-long increases, but you can sort the table according to whatever header, including year-over-year increases, by clicking on the header you want to sort by. Figures for the U.S. as a whole are also included in the table and bolded to differentiate.
Several key findings included:
- Georgia: The Peach State had the biggest decade-long percent increase in terms of premium per capita. As mentioned in the intro, Georgia has some of the most accident-prone highways. Couple that with the state's growing population and economy, and you have a recipe for a lot of car accidents and thus higher insurance rates.
- Correlation to population booms: Many of the states with the biggest population increases over the last decade (Georgia, Idaho, Colorado, Utah, etc.) also had some of the biggest increases in insurance premiums per capita. The more people, the more of a need for insurance.
- The national average: If you ranked it with the states, the U.S. as a whole would rank 18th for the biggest decade-long increase in insurance premium per capita at 44.08%. The majority of states had a smaller increase than this over the last 10 years.
- Year-over-year: Shifting focus to YoY trends, West Virginia saw a significant 5.45% decrease in insurance premium per capita, which was far and away the largest decrease. Conversely, Idaho led the way with a 6.40% increase in insurance premium per capita from 2019 to 2020.
Over the last decade, these states saw the biggest increases in premium taxes collected per capita from insurance companies
Next, we analyzed the data to see which states saw the biggest increases in premium taxes collected per capita from insurance companies.
This time, the data refers to insurance premiums from P&C insurance, in addition to life/annuity, and health insurance. All insurance companies must pay a state tax based on their premiums written in each state. Once again, we used each state's population figures from the appropriate years to normalize the results.
Similar to above, we ranked states according to the biggest decade-long increases in premium taxes collected per capita. You can sort based on whatever header you would like.
- Kansas, Oklahoma, & Arkansas: The Midwest/Southeast neighbors have easily seen the largest decade-long increases in premium taxes collected per capita from insurance companies. Kansas had a 198.40% increase, Oklahoma saw a 120.76% increase, and Arkansas had a 91.15% increase.
- The national average: Compared to the table above, the U.S. was more centrally located here, coming in at 28th with a 47.16% decade-long increase in premium taxes collected per capita. In 2020, a total of $24.7 billion in premium taxes collected led to a per capita average of $75.
- The lonely couple: Of all the states, just two, Oregon and Connecticut, actually saw a decade-long decrease in premium taxes collected per capita. Oregon's figure was -4.70%, while Connecticut registered -6.48%.
Decade-long increases in insurance premiums per capita by state by line
Finally, we saved a doozy for the final table. This is more of a deep dive for those who are interested.
You've been warned.
Below, we listed out each state's decade-long increase or decrease for direct premiums written (before reinsurance) for each specific line of P&C insurance. Similar to the first table, this one only refers to P&C insurance, but now it's broken out by line (private auto, commercial auto, workers comp, fire, homeowners, product liability, etc.).
Population numbers were once again used to normalize the results and get premium per capita figures. For this table, there are no rankings, but be sure to scroll left to right because there are A LOT of columns.
- Georgia, again: Unsurprising based on the stats from above, Georgia had the biggest 10-year increase when it come to private auto insurance premiums per capita, 75.18%. The state also had the biggest 10-year increase for commercial auto insurance premiums per capita, 128.94%.
- Burglary/theft, commercial auto, & inland marine: When looking at figures for the U.S., the P&C lines that had the biggest premium per capita increases over the last decade, were burglary & theft (134.03%), commercial auto (84.82%), and inland marine (83.94%).
- Financial guaranty, medical professional liability, & federal flood: Conversely, the P&C lines in the U.S. that had the biggest premium per capita decreases over the last 10 years were financial guaranty (-69.16%), medical professional liability (-10.02%), and federal flood (-5.26%).
If you'd like to see an Excel file of the data or have any questions, please email me at [email protected].
No disability insurance?
Here at Breeze, we are an online insurance broker with a specific focus on disability insurance, which replaces a portion of your income should injury or illness prevent you from working for a period of time.
Since disability insurance is not a P&C insurance product, its data was not included in the analysis, which was a bummer for us!
However, we're providing a quick info section here if you are interested in learning more about disability insurance and possibly applying.
Disability insurance comes in two different types: short term disability insurance and long term disability insurance.
Short term disability insurance is meant for temporary conditions, like a broken hand or maternity leave, and will typically replace about 60% of lost wages for a benefits period lasting between three and six months.
On the other hand, long term disability insurance works similarly but is meant for more severe injuries or illnesses, like cancer, that will keep you out of work for three months or longer. This type of product usually replaces between 60% and 80% of your income, and the benefit period can be 2, 5, or 10 years.
The average cost of disability insurance will usually be between 1% and 4% of your annual income, but this could vary based on your own personal factors, like job occupation, health, and policy choices.
