The going rate for a typical auto insurance policy nationwide will increase by 4 percent to $875 this year, as insurance companies struggle to win back huge losses on Wall Street.
An insurance industry trade group, the Insurance Information Institute, said consumers will be paying more this year for auto insurance, home insurance and life insurance after several years of lower premiums.
Last year, auto insurance premiums rose 3 percent, the trade group said.
Because insurers collect premiums from consumers and invest those funds in bond and stocks, the industry has been throttled by the poor returns on investments over the past year.
The Dow Jones industrial average is down by roughly 40 percent from its all-time high of 14,165, which it briefly reached on October 9, 2007, according to USA Today.
Insurers "cannot assume that interest rates will be much higher and stock returns much better in the foreseeable future," said Robert Hartwig, president of the Insurance Information Institute, the news provider reports.
That means consumers can probably expect rate increases next year as well.
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