Five economic changes that can affect consumers auto insurance


Five economic changes that can affect consumers auto insuranceThere are a number of changes that unassuming American citizens have made in the recent past without even realizing that it could affect some of the unexpected areas in their life – for example, auto insurance. Due to the recent economic crisis, Americans have made some changes in their lives, such as moving house, changing jobs, or downsizing vehicles etc. During the last year alone, at least 53% of the Americans have made certain economic-driven changes that may impact the auto insurance costs, as per the survey conducted by State Insurance Commissioners.

The NAIC or National Association of Insurance Commissioners survey has found some of the most common that has impacted auto insurance costs in the last one year and it includes:

  • At least 40% of the respondents were driving less overall and were mostly using the public transport to get around.
  • Around 20% of car owners had either got rid of their second vehicles or had traded in for a lower-priced model.
  • Almost 20% of the motorists had either canceled or reduced their auto insurance coverage in order to get some immediate financial relief.
  • There were also many who had relocated since the last one year.

The five most important trends that affected the auto insurance premiums were:

  • Relocating: Where the insured individual lives has a huge impact on the premium as they are calculated based on lots of factors and crime statistics is one of them. Street parking versus garage parking can also have a huge impact on the premium.
  • Change of vehicle – Whether you are purchasing a hybrid vehicle to save fuel, more expensive car or a less expensive one, paying off on a current vehicle, or purchasing a low-end car for your teenaged child, there will be a change in the auto insurance premiums. The model and make of the car affects the premium.
  • Change of jobs – People have turned to flexi work options and have had to relocate, while the others no longer have to commute huge distances, especially when they work from home.There were some who have even canceled their auto insurance and being uninsured and causing accidents can have far reaching effects financially.
  • Driving less: This means lesser mileage and paying less. Auto insurance premiums are calculated based on the annual mileage and at least 40% drove less compared to the past.
  • Credit Score: A bad credit score can seriously impact the insurance rates. A poor credit-based insurance score means higher premiums.