Car Insurance affected by the Economy:
The economic downturn that began in 2007 and is just beginning to turn around in 2010 had a major impact on every aspect of American life. We all had to tighten our belts a bit, make some hard decisions, and address the changes to our personal bottom line. One of the ways that many of us have tackled our household budget has been to change our car insurance policies.
Has the economy actually changed the car insurance industry as well? The insurance industry – not specifically the car insurance segment of the industry, but the overall insurance industry – took a bit hit in this particular economic slump. Many companies that are well know have had significant layoffs of staff and some have even gone under completely. If you are worried about losing your coverage and your policy, do not: state insurance regulators typically guarantee your policies up to $300,000 of coverage, so even if your company goes out of business, you are safe.
However, consumers are influencing the car insurance industry by making changes in their policies. Many are reducing the amount of coverage they have in an effort to cut overall costs. Others are increasing the amount of their deductibles to reduce the rate of their policy. Still others are making a very large mistake, and not having any coverage at all; the state of New Mexico reports that nearly a third of its populations – 29% – have chosen not to have any car insurance.
Not getting car insurance is a mistake. While the economy has changed, the laws have not – 48 out of 50 states still require drivers have car insurance before they get behind the wheel of any vehicle. Therefore, while it might seem like an easy way to slash your budget, if you get into an accident you will be facing a major personal economic downturn as well as charges for violating the law. Saving a few dollars now is not worth the risk.
Additionally, it is not smart to continue to be under-insured for the same reasons. If you choose to lower the amount of coverage you have in an effort to save money, you can still face serious financial hardship as the result of any accident if you do not have enough coverage. Even if you simply choose to increase the amount of your deductible, you risk causing yourself personal financial hardship.
The smart thing to do is cut your budget elsewhere, and preserve your car insurance. You can still work to save money on your policy by comparing car insurance quotes and the rates charged here at CarInsuranceQuote.com by various car insurance companies. Play it safe, and keep your policy comprehensive. It is the smart – and financially savvy – thing to do.