Are Car Insurance Quotes Becoming Less Affordable?

Is car insurance becoming less affordable? That is the question people are asking as rates continue to climb higher for some people. A 2014 study conducted by the Consumer Federation of America shows that low-income drivers may have a harder time finding a policy that is within their price range.

A Lack of Basic Coverage

Some of the big name companies, including State Farm, Allstate and Geico don't offer basic policies under $500 per year. Many drivers believe that this price is a fair rate for the minimum coverage for liability required by the state where you live.

The report created by CFA shows that 40 percent of drivers believe that $250 is a fair price for that coverage. It is often difficult to find any coverage close to that price by a reputable company. Of the 1,377 lower-income zip codes studied for the report, over a quarter charged $1,000 for the minimum required insurance. Another nine percent charged more than $2,000.

Driving Without Insurance

People who have low or limited incomes often resort to driving without insurance. While having liability coverage is required in every state except New Hampshire, many people still do not carry coverage because they can't afford it. At the same time, they have to get to work or take their families places, so they try to get by without a policy. Even when they try to find the lowest possible car insurance quotes, the rates are still often beyond their budget.

Each state has its own laws and every provider uses specific guidelines to determine rates. Newark, New Jersey and Detroit, Michigan are just two cities with high insurance rates, according to the CFA study.

The report also showed that the average annual salary in some of these low-income locations was $21,000. A $500 or $1000 annual premium would be quite a burden on these drivers.

How to Get Affordable Insurance

While the CFA is trying to get state and even federal regulators to look at the problems with insurance prices, drivers must find answers now. It may be difficult to find prices as low as you want, but you can find ways to cut your costs down. Here are a few options to consider when looking at car insurance quotes and shopping for the best prices:

  • Look at bundling with health, life and even homeowner's or renters insurance
  • Ask about good driver discounts or good student discounts if you have a teen driver
  • Try to find someone to carpool with and reduce your mileage
  • Raise your deductible

The CFA is trying to find a long-term solution to this problem, and has asked the National Association of Insurance Commissioners to conduct their own review of the affordability of auto insurance. In the meantime, drivers must look for other ways to save money on auto insurance. Driving without insurance is not the best answer, since an accident can result in many long-term consequences. Instead, try to find the best pricing by comparing car insurance quotes and looking for discounts.

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