Auto insurance companies still feeling the effects of recession


08Two years have passed since the last recession and people are still feeling its effects until now. While there has been great progress on how everyday Americans have been handling the situation, the recession has caused a lot of heartache and stress. People have been forced to take money from their retirement funds and readjust their budgets in order to make ends meet. In addition, most people have increased the amount of work they do, either taking a second job or working for longer hours.

The recent recession has everyone’s view on the way they view and use their money. It has forced people to become more careful, and more aware of the quality of service or product they’re going to purchase. They now work diligently to look and ask questions about transactions they plan to enter.

The auto insurance industry was not spared as well by the recession. In order to attract new customers, Insurers in the U.S. and most countries around the world have been forced to adjust their rates constantly. Existing customers, most of the time, are not informed by their insurers about the changing rates and insurance policies. However, keeping in touch with the continuously changing rates is not as hard and time consuming as you may perceive. Presently, there are hundreds of websites that allow you to compare quotes for car insurances from multiple companies in just a few short minutes, all you need to do is provide the basic information needed.

Many auto insurance industries now compete over price; despite this many still have not lowered their rates due to insurance fraud. There have been more and more cases of staged auto accidents, or cars being reported as stolen during this recession, and while the number of auto insurance fraud is increasing, consumers are paying the price with higher premiums.

Insurers are more hesitant nowadays to cover drivers with poor credit ratings as they are more likely to commit fraud than drivers with good credit ratings. However, a driver may face a higher premium despite having no history of fraud and may even be denied coverage.

Despite the difficulties that the struggling auto insurance industry faces, various panels and discussions with other segments of insurance industries have been underway on how to weather down the effects of the recession. In the long run, if they refuse to adapt to the changing times and changing views of customers, they may find it difficult to bounce back.