The state of Kentucky could be looking at lower car insurance premiums for their drivers. Data released by the National Safety Defense Council in the fall of 2010 displays a drop in the cost of accident claims in Kentucky. When the claims cost less money, Kentucky car insurance premiums and policyholders get to benefit.

The study showcases a 3% drop in the economic cost of claims in 2010. There are several suggested reasons for the decrease in costs. Experts mention that some of the data is due to yearly variable adjustments made to the stats. However, that does not account for the whole amount of the decrease in costs.

Despite it costing less for car insurance companies, the state actually shows an increase in the number of car collisions and accident claims last year. 2010 saw a jump of over 2,700 incidents from the prior year, averaging about a 2% increase.

So why did the claims cost less money in 2010?

The numbers seem to suggest that the reason for the monetary savings is that there were less serious injury and fatality claims in 2010 than there had been reported in prior years. The cost savings between a minor car accident and one with serious of fatal injuries is significant.  The average amount it costs to cover a claim with only property damage is about $2,500. Collisions involving minor injuries cost an average of about $12,500. However, if there is a serious injury the cost average jumps to around $70,000 with fatalities costing and average of $1.3 million each. In 2010, Kentucky spent $980 million on fatality claims. The state managed an average of 5% fewer fatal car collisions last year and 10% fewer incapacitating injuries.

Auto insurance companies, if their data is similar, should be able to take advantage of this change in statistics to offer lower car insurance premiums to their customers. If the claims cost less, the company spends less and does not need as much to maintain their individual profit margins. These savings directly translate to their client base as premiums for the area decrease.

The Kentucky Department of Insurance suggests additional ways to save money on auto insurance including keeping credit reports updated, driving less, avoiding driving distractions like eating and cell phone use and decreasing the chance of loss or theft. A clean driving record, regular vehicle maintenance and being knowledgeable about qualifying insurance discounts will help Kentucky residents save even more on car insurance.

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