Consumers Dropped Coverage, Increased Deductibles During Recession
Dropping coverage during a recession seems like an easy straightforward way to save money, but it means that you accept more risks. At the peak of the recession, consumers dropped coverage, increased deductibles, and assumed more risk for themselves to save an average of $229 per year, according to a new study conducted by analytics firm, Quality Planning.
Free Car Insurance Comparison
Secured with SHA-256 Encryption
UPDATED: Jan 18, 2021
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance related. We update our site regularly, and all content is reviewed by car insurance experts.
For many households, staying afloat means cutting costs when finances get tight. And that is exactly what happened in the recession. At the peak of the the recession, many people dropped their levels of coverage on insurance and assumed more risk for themselves, according to a new study conducted by analytics firm, Quality Planning.
The greatest number of those who dropped coverages in the timeframe of the study, which includes data collected from 2006-2010, did so on cars that were 10 years or older.
Dropping comprehensive and collision insurance on older cars is one of our 10 steps to lowering car insurance costs, and that’s exactly what the majority of these consumers did. The study indicates that a full 63 percent of cars that are more than 10 years old are now insured with their state’s minimum liability coverage, up from 53 percent when the study began.
Dropping these coverages saved consumers an average of $229 per car annually.
While consumers may have been willing to increase their risks significantly with older cars, the same cannot be said for those who bought new cars in the same period, although they too did slightly increase their risks by raising the amount of their deductibles, which is yet another of our 10 steps.
While new car purchasers did purchase full coverage for their autos, including liability, collision and comprehensive insurance, there were significant increases in those who were willing to choose a higher deductible amount on those coverages. Those choosing higher deductibles ($251-500 and $501-$1000) increased between 1.6 and 4.9 percent per year during the study.
Having the right coverage at the right price is important. And most people have been with their current auto insurer for a decade or more. While both dropping coverages and raising deductible amounts are easy steps to lower your car insurance costs, sometimes the easiest and most effective one is to shop around and obtain quotes from other companies.