Property and Casualty Insurance Information for Auto,
Homeowner, Renters, Liability, Workers Compensation and More

What's Covered In An Auto Policy

The auto policy can (but does not have to) include coverage for up to six distinct risks, each of which is priced separately. They are:

  • Bodily injury liability, for injuries the policyholder causes to someone else.
  • Medical, or in some states, Personal Injury Protection (PIP) for treatment of injuries to the driver and passengers of the policyholder's car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident.
  • Property damage liability, for damage the policyholder caused to someone else's property.
  • Collision, for damage to the policyholder's car from a collision.
  • Comprehensive, for damage to the policyholder's car that does not involve a collision with another car. Covered risks include fire, theft, falling objects, missiles, explosion, earthquake, flood, riot and civil commotion.
  • Uninsured motorists coverage, for treatment of the policyholder's injuries as a result of collision with an uninsured driver. No state requires car owners to carry insurance for all these risks. But many states require drivers to carry minimum amount of liability insurance for bodily injury and property damage, as well as personal injury protection coverage.

In Georgia, the limits required by law for automobile insurance are 25/50/25. The first two figures refer to bodily injury liability and the third figure to property damage liability. For example, $50,000 for all persons injured in a single accident, subject to a limit of $25,000 for one individual, and $25,000 coverage for property damage.

Georgia Insurance Information Service
Fact Sheet

Saving Money on Your Auto Insurance --What Can You Do?

  1. Choose a safe car.
    When you buy or lease a car, choose on the basis of safety features and the cars record of crashworthiness, if it is easily damaged and repair costs. If the safety features you want such as air bags are not offered, complain to the auto makers. Some of them already are getting the message. Safety sells.
  2. Drive smart.
    Drive carefully and use safety belts and child restraints. Always drive defensively and stay alert. Never get behind the wheel impaired by alcohol or other drugs. Obey speed limits and other traffic laws. Set a good driving example for your children. Support enforcement efforts by the police and courts against drunk driving.
  3. Fight insurance fraud.
    Fraudulent claims can cost your insurance company millions of dollars each year. These costs are passed on to you, the policyholder in increased premiums. Report fraud to your insurance company to the State Insurance Department or to law enforcement agencies.
  4. Talk to your agent about ways you can save.
    You may be able to reduce your premiums by reviewing your policy to reassess the coverage you have. Are your deductibles too low for your financial situation? Do you need the optional coverage? Does your coverage duplicate other coverage you have? Your agent or company representative can help you analyze your policy to identify savings. Shop for auto insurance: compare prices, coverage and quality of service. Keep your driving record clean to get lower premiums. Take advantage of discounts offered by your company.
  5. Secure your automobile -- prevent auto theft.
    Many companies offer discounts if you install an active or passive auto anti-theft device in your car or if you etch the vehicle identification number in the corners of your windows. Park your car in a protected area. Always lock your car. Never leave packages or belongings in sight in your car. Avoid known high-risk parking areas.
  6. Help control medical costs.
    Quality medical care is not necessarily the most expensive. Challenge doctor or hospital fees that appear to be unreasonable or that seem to be unnecessary treatment. Educate yourself on appropriate medical treatments and avoid unnecessary medical charges from your doctor and hospital.
  7. Lower your repair costs by using competitive replacement parts.
    Replacement parts supplied by someone other than the auto manufacturer can save up to 33 percent on repair costs. Certified replacement parts have been found to be equal in quality to the original manufacturer s parts with warranties that also are equal or better. Used parts are also a cost effective alternative in quality auto repairs.

Georgia Insurance Information Service
Fact Sheet

Why does auto insurance cost more in Atlanta?

Auto insurance costs more in Atlanta than it does in other parts of Georgia. In Atlanta, the risk is higher and so are many related costs resulting from a claim.

For instance, there are many more traffic accidents in and around a big city because there are so many more people and cars. This frequently results in overcrowded roads and highways which exacerbates the tendency for more accidents. Big metropolitan areas also see higher speeds and bigger problems with what is termed "road rage."

Overall, auto insurance rates in Georgia are very reasonable.

  • Auto industry sources report that in 1996 (the last statistical year available), Georgia ranks 25th out of the 50 states in Average Expenditures for Private Passenger Automobile Insurance at $627.47. Nationwide, the average expenditure for auto insurance is $685.11.
  • The Combined Average Premium in Georgia ranks 22nd nationally at $761.34 (which includes the Liability Average Premium + Collision Average Premium + Comprehensive Average Premium). The national average is $774.12.

To view this issue from the standpoint of what contributes to automobile rates, traffic accidents are not the only issue. Several other factors to should be considered when it comes to the cost of insurance.

  • The cost of vehicle repair is higher in large urban areas and there is a greater risk of auto theft and vandalism. According to the FBI’s Uniform Crime Reports, the 1996 ranking of metropolitan areas with the highest rate of auto theft, Atlanta is 5th with 32,597 auto thefts. Long Beach, CA is ranked 1st with 90,542. Savannah, Georgia is ranked 89th with 1,659 thefts.
  • The cost of healthcare is also an expensive factor, and it is more expensive in urban areas, due in part to a more costly labor pool, insurance fraud and higher institutional costs.
  • There is a greater incidence of auto insurance fraud. According to the Insurance Information Service, auto insurance fraud adds about 10 percent to the typical annual auto insurance premium. Fraud has other costs, not the least of which is the cost of investigating and settling these cases.
  • The litigious nature of society, the willingness of people to sue each other, is very much in evidence in metropolitan areas and cases dragged through the courts add to the eventual pricing of auto insurance.

Other factors include the years of experience upon which each insurance company relies for calculating risk, factoring in both risk and a reasonable profit, ultimately combines to allow an insurance company to establish its rates.