How Auto Insurance Rate Hikes May Affect Consumer Behavior

Lynn Martelli
Lynn Martelli

Lately motorists have been facing high gas prices and increased renewal quotes. Considering everything else is going up too, it may not be hard to guess this was coming. Consumers have been trying to reduce their bills for some time now and that they may be running out of wiggle room. People should know that they can fight back by car insurance price comparison shopping.

Still, it may be a hard pill to swallow if you have never made a single claim for years. The problem would be exasperated if you recently made a claim or got a traffic violation ticket since the rate hike would be substantial. Unfortunately, a few drivers will end up accepting the new reality and pay the bill, as it is something you cannot do without legally or financially.

In a way, insurance is a collective support system that is run by a few companies. When a few policyholders get compensated out of the pool and it is eroded by increased costs in auto repairs and injury claims the depleted resources have to be replenished by everybody in the system. The logic is that it could be you who put in the next large claim and the money will be there to compensate you.

Recent Surveys Shed a Light to Consumer Reactions

According to recent surveys carried out by J.D. Power and other companies, motorists have been shopping around more and they attribute this to price increases. For example, 35% of motorists who shopped for vehicle insurance quotes said that they had to do it because of the jacked-up premiums.

The good news is that another survey shows about 26% of those people managed to save at least $200 or more. This is normally a large enough figure to encourage most people. Again, the same study shows that 92% of people who switched saved money.

Are More Motorists Expected to Shop Around?

It may be a boring task but at least it isn’t a time consuming one thanks to online car insurance comparison websites that make it really easy and fast. Most analysts and economists expect the current conditions to last a bit more. This suggests that more and more people would be coming out to look for better rates as they receive their renewal notices.

Considering most providers would be in the same boat, people aren’t necessarily in a better bargaining position. The problem was that people could afford to be complacent since they weren’t cornered with increasing bills all around. Whatever the reasons, it is good to see that people are checking the competitiveness of their carriers. You may have been paying over the top for years and had no clue about it. Now you will probably have to find out.

One of the easiest things may be to drop coverage but it isn’t really that viable solution anymore. Second hand automobile prices went up a lot as well that makes your car even more valuable now not to insure. Besides, it is unlikely that savings achieved by dropping coverage would be worth it. Before going down that route, you should give it a try and see where alternative quotes end up. 

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