Getting Car Insurance in a Bad Economy
The economy is not in great shape, with growing unemployment rates and debt. When it comes to getting car insurance in a bad economy it's important to look for ways to try and save money on your rates. You have three options for when you're looking to save money on insurance in a bad economic climate: renew your coverage at a higher rate, cut down on your coverage, or go shopping for cheaper insurance.
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UPDATED: Oct 30, 2020
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As you very well know, the economy is currently in the dumps. Unemployment is high, debt is growing, and homes are foreclosing. Money isn’t nearly as available as it once was, and we are all trying to save money where ever we possibly can.
When the economy goes sour it effects everybody. Not only are we looking to save some extra money wherever we can, but the insurance companies are also trying to increase the profit margins. This puts those looking to renew their auto insurance in a tight position. You are typically left with but 3 options:
- Renew your coverage at a higher right
- Cut down on your coverage
- Go shopping for cheaper insurance.
We strongly recommend that you resist the urge to drop your auto insurance policy. It’s required by state law to carry a certain amount of auto coverage, remember? If you’ve been a responsible customer and driver, you are in luck. Your ability to find the same amount of coverage for a much lower cost is highly likely.
Those that haven’t made timely payments, and those that have found themselves in multiple collisions won’t have nearly as much wiggle room. But don’t worry just yet, there are still some things you can do to hopefully lower your auto insurance costs. Continue reading below to learn more about the auto insurance situation during a recession, and how you, as a consumer can still save money despite the bad economy.
Insurance Fraud During A Recession
During a recession, many people turn to committing auto insurance fraud, to get some money back in their pockets. The insurance companies do everything they can to prevent fraud from occurring, but they aren’t able to catch each and every person. As a result, more people are filing claims and the insurance companies have to shell out more and more money.
Just as with a brick and mortar retail store, when there are large amounts of theft, auto insurance companies are forced to raise their prices to make up for lost profit.
Your best option at this point is to go looking for equal coverage, at a more affordable price, or find ways to cut the cost of your auto insurance.
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Finding Other Coverage
No matter what your situation is, chances are you will be able to save some money on your current auto insurance coverage. All it takes is a little effort. Even if you’re able to save only $10 per month, that’s a lot of money that could be spent elsewhere… Like paying off other bills! Let’s look at some options:
A simple phone call – Sometimes that’s all you need. Don’t be afraid to give your insurance provider a ring. You’d be surprised what kind of discounts you could get. Just ask!
Get Multiple Quotes – There are so many car insurance quote services online, there is no reason you shouldn’t be able to find a better deal than what you currently have. Even in a down economy, smaller companies are always available to cut you a better deal. If you haven’t explored the many auto insurance options you have available to you you are missing out. In more stable economic times, people would go years without checking how their current policy stacks up against other options. But now we can’t afford to be so careless. Getting multiple quotes is as simple as entering your zip code above.
Know What You Are Getting – Far too often people jump on an offer just because it has a lower price tag. Make sure you take an in-depth look at what kind of coverage you will be receiving. Before looking at any quotes, make a list of personal requirement you have for coverage, by doing so you will better be able to resist the urges of settling for a plan with minimal coverage.
If you haven’t explored the many auto insurance options you have available to you you are missing out. In more stable economic times, people would go years without checking how their current policy stacks up against other options. But now we can’t afford to be so careless. Getting multiple quotes is as simple as entering your zip code above.
Cutting Your Auto Insurance Premiums
The three tips below are things that anybody can do to help save on their insurance rates when times get tough. During a recession, don’t be afraid to…
1) Raise Your Deductible
This is by far the most reliable way to save a bunch of money on your auto insurance. Raising your deductible can have amazing effects on what you pay for your coverage. Don’t get greedy and raise it too high though, even if you think you’re the one of the best drivers on the road.
2) Car Pool
Consider carpooling or taking public transportation to work. The distance you drive greatly effects how much you will be paying. Additionally, if you can cut your mileage significantly, pay-per-mile auto insurance may be able to save you hundred of dollars each month.
3) Reevaluate Your Needs
You can significantly cut down the cost of your auto insurance by purchasing a smaller, cheaper car. In addition to saving on your insurance, you will also be saving quite a bit on gas by driving a smaller car. Try reevaluating your insurance needs and balancing your coverage types, your needs may different than you thought.
Remember not to sell yourself short. You wouldn’t get inadequate coverage in a prosperous economy. Why would you put your finances at even greater risk during a recession, when money is tight?
Additional Links Regarding Auto Insurance In A Bad Economy
- Coverhound – Does a bas economy mean higher car insurance rates? Find out at cover hound
- ABC News – Good article about how there are more auto and car insurance fraud cases in a bad economy