Insurance

After 24 years of steadily climbing rates, auto insurance premiums dropped in 1998, and have continued to drop into 1999. State Farm, the nation's largest auto insurer since 1942, has been lowering premium rates for the past two years, says Dave Hurst, a company spokesman.

Some of the reasons for this unprecedented drop include fewer highway fatalities, lower car-theft rates and a holding pattern in claim costs as vehicles are made safer and more resistant to damage. "State Farm's use of non-original equipment manufacturer (OEM) parts and increased marketplace competition are other contributing factors," Hurst explains. Some companies aggressively pursue hard-to-insure drivers, and offer lower rates to better drivers. The residual market, which is made up of the hardest to insure, has been declining in recent years. Online auto insurance quote services, although they haven't been realized to their full potential, also have increased the competition.

The annual percentage rate changes were calculated by the Bureau of Labor Statistics using the Consumer Price Index — All Urban Consumers for motor vehicle insurance. The rate change between January 1998 and January 1999 was -0.6 percent.