Experts Concerned Over High Cost of Auto Insurance

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  • The rising cost of auto insurance has been a serious issue for many Americans in the last several years, and now a large and growing number of both government agencies and consumer advocacy groups are looking to do more to deal with these issues. This problem may be particularly impactful for Americans with low and middling incomes, and now there are calls for solutions to these problems going forward. In the future, agents may need to be aware of these concerns for their lower-income clients, and also keep a close eye on any regulatory steps being taken in this regard.

    In 15 major cities across the country, the average premium charged to low- and middle-income drivers was usually more than $1,500 annually, taking up what could be a significant portion of their annual income and potentially preventing them from owning a car in the first place, according to a report from the Consumer Federation of America. That number is also about double what the vast majority (79 percent) of these lower-income people said was a reasonable price for their auto insurance coverage.

    “High auto insurance premiums represent a huge barrier to car ownership, and economic opportunity, for millions of lower-income Americans,” said Stephen Brobeck, CFA’s Executive Director. “Researchers agree that they and other Americans, even those in large cities, gain access to better jobs and other opportunities through access to a car.”

    What can be done?
    The CFA is consequently calling for state governments to start doing a little more to help these drivers, who typically don’t have as much to spend, to deal with such necessary costs, the report said. Some states, such as California, already do so, but the fact of the matter is that most do not, and that could create some real issues.

    In the meantime, the more insurance agents can do to make sure their clients fully understand why they have to pay what they do for auto insurance, the better off they’re likely to be when it comes to keeping those people satisfied with their coverage. Strong customer service is often more valuable to consumers than simply being able to cut costs, but when low-income drivers are involved the latter can be crucial as well. Thus, it might be wise for agents to do a little more to try to strike the right balance in this regard.