Low income families plan and somehow manage to own a personal vehicle. However, auto insurance companies are notorious in putting the proverbial straw, which breaks the camel’s back. Insurers pricing policies and computing premiums in different ways end up putting a huge burden on such drivers. This is a somewhat ambiguous truth brought to the surface by a new report from the Consumer Federation of America. Every driver seeking affordable car insurance for low income could do well to go through it at least once. Accordingly, cost of car insurance is becomes an obstacle to owning a personal vehicle even if they can manage to afford the vehicle itself.
The broader economic implications are significantly relevant since personal vehicle has become almost a necessity. Families need to get to work, school, day care or the grocery store and this is only the beginning of travel in neighborhoods. The prospect of car insurance for low income becoming a common feature of daily life is already here. The report, “Lower-Income Households and the Auto Insurance Marketplace: Challenges and Opportunities” reveals owning a personal vehicle drastically improves chances to take advantage of economic opportunity. This report written by Stephen Brobeck, executive director at the Consumer Federation of America and co-author J. Robert Hunter, includes academic and regulator literature as well as their own research.
If affordable and cheap car insurance for low income drivers and families is to be made available, someone needs to do something about it. The report is an initiative informing detailed factors and communicating the urgency behind the need for some constructive steps towards this goal. Those in relevant positions of state regulators can do a lot to ease the situation. Commonly speaking, insurers base premiums on many factors. However, the overall process results in putting lower- and moderate-income families — or households with roughly $20,000 to $40,000 in earnings — at a disadvantage. Home owners pay less than non-owners do, as do those in low paying jobs with lesser education.
Online search engines belie the fact that 30 day auto insurance policy could be of limited significance. Our earners’ spectrum across the country has varied experiences in searching for affordable auto insurance policies. When free online quotes are compared at a glance, it is clear that consumers with thinner or blemished credit are quoted higher rates. Moreover, data analytics point to drivers having previous coverage with lower limits on bodily injury are also charged more! It is a legal fact that insurers and car insurance carriers in general are prohibited in listing driver income on policy requests.
But sadly, it has fallen far too way short of stopping insurers getting relevant information. Alternative information is often used as a substitute or proxy for earnings.
More shockingly, it is seen that drivers from occupations with low driving risks but having earning very less have to pay costly premiums towards their auto insurance policies.