You want to know why automobile insurance cost so much more in Connecticut than in other states.

SUMMARY

Automobile insurance rates in Connecticut for personal automobile insurance are among the highest in the nation. Connecticut's physical attributes, economic and traffic conditions, and the size and type of its automobile insurance system are factors that contribute to the high cost of automobile insurance.

Connecticut's average insurance expenditures and average premiums are relatively higher because policyholders tend to buy higher limits of coverage and insure more expensive cars. Automobile premiums are also higher here because a higher percentage of Connecticut's population lives in urban areas.

DEMOGRAPHIC FACTORS

Connecticut is highly urbanized with an estimated population density of 673 people per square mile, which makes it rank 5^th nationally. Connecticut is 9.5 times as densely populated as the nation as a whole (70.6 people per square mile) and ranks 3^rd (tied with Massachusetts) for the percentage of its population living in metropolitan areas (95%).

The state's residents are relatively prosperous and have excellent access to medical and legal services. Per capita income in Connecticut is first in the nation at $35,954. The number of doctors per 1,000 population is 5^th among the states at 3.08 or 40% higher than the national average. The number of lawyers per 1,000 population is 6^th among the states at 3.93 or 35% higher than the national average.

Traffic density and road usage in Connecticut are high. The number of registered automobiles is estimated at 2,496,000 or 777 per 1,000 population, which is 36.1% higher than the national average. The National Association of Insurance Commissioners reported that each mile of highway in Connecticut was used 1,420,000 times in 1998. This made Connecticut the 5^th most congested among the states including the District of Columbia. Road usage was 2.7 times the national average.

AUTOMOBILE INSURANCE SYSTEM

Automobile insurance rates can vary depending on the type of auto insurance system the state adopts.

Some states have a tort system (which allows the accident victim to sue the party responsible for the accident). Others have no-fault or add-on laws (which restricts or limits an accident victim's right to sue the party responsible for the accident). Some states do not have a compulsory automobile insurance law. Minimum required limits for liability vary from state to state as well as required policy benefits. Some states have a much higher exposure to uninsured motorist than other states. All of these variations have an affect on the cost of insurance.

Connecticut is a tort law state that allows innocent accident victims to sue the responsible party for his injuries without first meeting certain monetary thresholds or injury requirements. Insurance is mandatory and the minimum liability limits are higher than in some states. Exposure to uninsured motorists is modest with an estimated uninsured motorists population of from 8 to 12%, much smaller that in some large states.

AVERAGE EXPENDITURE AND PREMIUM

The nationwide average insurance expenditure per vehicle was $704 in 1998. (The average expenditure is defined as "the total written premium for each coverage divided by the liability written car-year". A written car-year is equal to 365 days of insurance coverage for a single vehicle and is the standard measure of exposure for automobile insurance).

Eighteen states (including Connecticut) and the District of Columbia had an average expenditure greater than the national average, while 31 states had an average expenditure less than the national average.

The combined average premium for Connecticut drivers was $958.19 (ranked 7), $976.97 (ranked 6), $982.78 (ranked 6), and $970.49 (ranked 5) in 1995, 1996, 1997, and 1998, respectively. The combined premium equals the average liability, collision, and comprehensive premiums.

JH:ts