In today’s economy we are all looking for ways to answer financial challenges. Many of our responses to these challenges can also affect car insurance rates, both positively and negatively, and the choices others make can also affect you and me. A recently released survey by National Association of Insurance Commissioners (NAIC) shows that 53 percent of consumers have made a lifestyle change that could impact the cost of their car insurance.
The findings are not too surprising:
- 39% Taken public transportation more and/or drove less
- 16% Cancelled or reduced your auto insurance coverage
- 13% Gotten rid of a second vehicle
- 6% Traded in a vehicle for a lesser value car
- 4% Fallen behind on car payments
We all need to do what we can to balance our budget but sometimes there may be unintended consequences. Driving less can reduce the cost of your insurance since distance to work and frequency are one of the rating factors many insurance companies use to calculate your rate. And, of course, fewer cars to insure will almost always reduce how much you pay as will not needing comprehensive and collision coverage on your vehicles. But what about canceling or reducing your insurance coverage directly?
Liability Insurance Protects You
It may seem that dropping insurance coverage would be a great way to save some money but could prove the most costly. First, they are called “accidents” for a reason. None of us plan to run a red light, change lanes without looking, or drive though the crosswalk without noticing the pedestrian but these things happen every day. If you are at-fault in an accident, your insurance company steps up and protects you. Most people think backwards and believe the insurance company is paying the other guy — no, they are covering you, cause without the insurance you would be paying the other guy out of your pocket. If your bank account can’t pay, then maybe you own a home or even a paycheck that can be garnished until God-knows-when.
Second, even not-at-fault accidents can cost you. Remember how many folks have dropped their insurance? What if one of them hit you. Hard. Car. Hospital. Medical bills. Yes, if you don’t have enough coverage to protect yourself then even a not-at-fault accident can put you in the poor house unless you have protected yourself with adequate insurance.
So, in light of today’s economy, let me recommend talking to your agent about ways to cover yourself better. You may not even have to spend any more money. A creative good agent can help you find ways to save so you can afford what you need. You could make payments on a $1,000 deductible that you put on a credit card — and be able to afford Uninsured Motorist coverage or Personal Injury Protection.
You can call us or come into one of our offices in Kennewick, Pasco, or Yakima, or use our online quote page to build your car insurance policy with the coverages, options, and deductibles that you can afford.
Don’t take chances with your future.