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Study Ranks Auto Insurance Losses

Looking to lower your auto insurance rate? Consider moving.

The insurance industry, in a new study, confirms what some consumers long have suspected: Where you live affects the price of premiums.

For example, car owners in Miami, New York City or Newark, N.J., where a lot of vehicles are stolen, generally pay heftier insurance bills than drivers in other cities.

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In the most comprehensive study of its kind, the industry's Highway Loss Data Institute examined insurance losses from theft, vandalism or forces of nature, such as floods, for vehicles up to 3 years old in hundreds of cities nationwide over a dozen years. It tracked losses on 3 million passenger vehicles.

The losses vary by as much as $250 a year on average per registered vehicle from city to city. That cost is passed on to consumers in higher premiums on the comprehensive portion of their insurance policies, the insurers say.

The dubious distinction of the highest losses in the past three years belonged not to one of the nation's biggest metropolises but Grand Forks, N.D., which was ground zero for last year's massive flooding when the Red River broke its banks. There the comprehensive losses averaged a chart-topping $315.

Ranked second was Miami, a city with a large number of auto theft claims, at $286 per vehicle.

Over the 12-year span, the losses per vehicle skyrocketed in Miami from $69 in 1985, while those in the New York and Newark, N.J., area peaked several years ago but remain generally high at $168. The losses in many Texas cities declined sharply, especially in Houston from $139 to $56. Texas has an extensive auto-theft prevention program.

The losses in San Diego and Los Angeles have declined recently to $97 and $89, respectively.

The comprehensive portion of an auto policy covers noncollision damages. Thefts are the biggest single type of dollar loss.

"If you live in an area with a high rate of insurance claims and theft, then your premium is going to be higher," said Dave Hurst of State Farm, the nation's largest auto insurer. "There are big variations in comprehensive insurance rates and part of that is geographical. Also, how much the car is worth has a lot to do with it."

It is too soon to say whether North Dakota's flood, presumably a one-time disaster, will be reflected in the region's auto insurance rates; insurers tend to draw up their rates based on a region's history over multiple years.

But theft trends have shown up in what people pay for comprehensive insurance.

For example, a Miami resident with a good driving record could get insurance on th comprehensive section of a policy for a 1997 Ford Taurus or Honda Accord for $278 a year with State Farm.

In comparison, Lima, Ohio, a top five city for the least amount of noncollision insurance losses, had an average loss of $36 per insured vehicle. A Lima resident with a good driving record could get comprehensive insurance with State Farm for a 1997 Taurus or Accord for $62 one-fifth the cost of the Miami resident.

Law enforcement officers and insurers say cities with large ports, such as Miami and the New York area, are vulnerable to auto theft because stolen vehicles are increasingly being shipped overseas. The cars stolen for shipment are usually expensive luxury vehicles, while those going across the Mexican border, another hot spot, are usually sport utility vehicles or pickups, officials say.

"There is a pattern of geographic theft losses associated with port cities. Shipments of stolen vehicles overseas is driving this trend," said Kim Hazelbaker, senior vice president of the Highway Loss Data Institute.

Twenty years ago, more than 90 percent of stolen autos were recovered by authorities, said Ed Sparkman at the National Insurance Crime Bureau. Now one-third - roughly 450,000 vehicles - disappear permanently and up to half are being shipped to Europe, Latin America, the Orient or elsewhere, officials said.

Only 1 percent of stolen autos shipped overseas are caught at the port, U.S. Customs officials said. Most are confiscated at the ports of Newark, Miami, Jacksonville and Port Everglades, Fla., and Los Angeles-Long Beach.

Written By Catherine Strong

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