Americans spend less than 6 percent of their budget on insurance, according to a report by the Alliance of American Insurers.
A survey of more than 15,000 households conducted by the National Family Opinion Research Inc. for Alliance found that in 1991 persons sharing the same housing unit spent $953 on auto insurance and $420 on homeowners insurance.Compared with last year's study, this reflects a 3 percent increase in auto insurance and virtually no change in homeowners.
Information just released by the U.S. Bureau of Labor Statistics shows that in 1989 auto and homeowners insurance represented 2.5 percent of household spending.
With life and health insurance accounting for approximately 3 percent, the insurance expenditures represented less than 6 percent of total household spending that year. According to Greg Heidrich, Alliance vice president of research, household spending for 1990 and 1991 is projected to be in a similar range.
"While some of the insurance industry critics say consumers devote an
average of 15 percent of their budgets to insurance, data from the U.S. Bureau of Labor Statistics show the actual figure to be less than 6 percent," said Brian Smith, Alliance research manager.
Mr. Smith said the Alliance survey shows that half of all households spend less than $800 annually for auto insurance. Five percent spend $250 or less and about 6 percent more than $2,000.
Mr. Heidrich said expenditure levels vary from state to state because of differences in state insurance laws, driving conditions, auto theft rates, and cost-of living differences. However, the main factors are state variations in per capita income and degree of urbanization, he added.
State averages range from $1,467 a household in New Jersey to $515 in North Dakota.
"Since urban areas are more densely populated, there is a higher frequency of auto accidents and thefts," Mr. Heidrich said. "The cost of paying all those claims is then reflected in insurance premiums."
Regarding homeowners insurance, Mr. Smith said half of all households spend less than $328 annually. About 8 percent spend $150 or less and 9 percent spend more than $750.
The most important factors here resulting in variations are real estate values and the frequency of damaging windstorms, such as tornadoes and hurricanes.