A recent study conducted by the Consumer Federation of America reveals that low income drivers may not be able to afford auto insurance. The research shows that it may not be the choice of low income drivers to drive without auto insurance; it may actually be that they can’t afford it. When questioned, the majority of Americans, 76 percent to be exact, felt that the minimum liability auto insurance coverage should be under $500 per year to make it more affordable for everyone, especially for the poor.
Meanwhile, 40 percent of the same group believed that drivers should be charged an even lower amount of under $250 for the coverage. While the suggested amounts of $250 or $500 annually could give the coverage more affordability, such a basic auto insurance policy with a yearly premium under $500 is not made available by the big five insurance companies in the country – Allstate, State Farm, Progressive, Farmers, and Geico.
The reality is, for people with incomes that allow them to manage the higher premiums, driving without insurance is not an option, but for those with lower incomes, the cost can frequently be expensive. As a result, many are forced to drive uninsured, regardless of the fact that all but one state, New Hampshire, require that drivers purchase at least liability coverage. According to the study, being faced with high annual auto insurance premiums can also have an adverse effect on educational and career advancement opportunities.
It goes without saying that people need to be able to drive their cars to go about their daily duties, such as getting to work, school, or the doctor, but the high price of auto insurance can often make it difficult. Furthermore, per the Consumer Federation of America report, insurance premiums set too high can prevent economic opportunity for some Americans, which can also explain the reason why a large number of lower-income Americans are more likely to drive without insurance.
Case in point, several cities currently lay claim to the highest auto insurance premiums in the country. Detroit, New Orleans, Grand Rapids, and Baton Rouge are consistently above the norm when it comes to rates that may be too expensive to permit their motorists to afford liability coverage.
Of course, the cost of this coverage can vary greatly from one insurer to the next, depending on the individual’s driving record and location, as well as a number of other factors. But, the bottom line is – if low income drivers are unable to find affordable auto insurance, it creates a much higher liability for those drivers who are insured.
In fairness, auto insurance should be affordable for everyone. Even with a moderate income, the burden of paying high monthly premiums can present a hardship. For this reason, the Federal Insurance Office has started to track the level of auto insurance rates each of the states charges. By doing so, the hope is to determine how to better measure the affordability of coverage, especially among minority and lower income motorists.
Still, affordability is the key…which is why you should compare quotes to not only find the coverage you need, but to also make sure you’re getting the best rate on your auto insurance. Why not get a free auto insurance quote today?
Are you finding it difficult to pay your auto insurance premiums every month? Feel free to share your thoughts in the comments section belo