Regulatory systems that allowed the most unregulated activity produced the lease competitive markets, as per a December 2013 study by the Consumer Federation of America. The study examined insurance trends across the country from 1989 to 2010. Whereas the auto insurance expenditure had risen by 43.3 percent across the country in the 21 years, costs in Idaho had gone up by 57.3 percent.
Despite a high rate of growth, insurance costs in Idaho were still lower than the countrywide average as of 2010. In 1989, the average expenditure on auto expenditure in Idaho was $348.31 while the countrywide average stood at $551.95. In 2010, the average costs in Idaho ($547.78) were still lower the countrywide average ($791.22). In fact, rates were low enough for Idaho to go from being ranked the 44th most expensive to the 48th most expensive state in terms of auto insurance expenditure from 1989 to 2010. In order words, Idaho is still one of the cheapest states, on average, to buy auto insurance.
However, with a high growth rate of 57.3 percent in auto insurance costs, the gap is bound to close faster. Idaho’s auto insurance regulations are not as strong as those in states that achieved more success in keeping the rise in costs at a lower rate. California showed a decrease of 0.3 percent in auto insurance expenditure between 1989 and 2010 making it the only state to show a downward movement of costs. California’s success is largely due to its pioneering and strong auto insurance regulation, as per the study. If Idaho were to follow California’s example and put in place strong regulations it can help insurance costs remain at a low level. Putting in place a Prior Approval regulatory system, which requires insurers to obtain approval from the state for rates changes before being implemented in the market, is one of the best ways to counter a rapid rise in insurance costs.