Best Auto Insurance Companies of October 2021 – Forbes Advisor
Auto insurance rates have been rising steadily for decades, except for a sharp drop in 2020, when auto insurance companies offered refunds and credits to provide financial relief. to customers facing declines in revenue related to the pandemic and to account for the sharp reduction in driving. .
Over the years, soaring medical bills and increasingly expensive auto repairs have combined to continually increase what we pay for auto insurance. But for the most part, consumers think auto insurance rates are fair or don’t have strong feelings about them. A new YouGov survey for Forbes Advisor found that 48% of American adults believe auto insurance rates are “fair” or “very fair.” Another 18% are on the fence, deeming the rates neither fair nor unfair.
Of the 31% who find auto insurance rates “unfair” or “very unfair”, half (50%) have nevertheless taken no action in the past 12 months to seek a solution. About a third say they got at least an insurance quote from another company, and 11% have changed companies. A notable proportion (12%) say they have reduced their overall auto insurance coverage in the past 12 months.
While nearly half of Americans think auto insurance rates are fair, a closer look under the hood reveals that “fairness” drops rapidly when people are asked about specific pricing factors that are commonly used. to set auto insurance rates.
Use of credit? 69% don’t like it
For example, 69% of survey respondents did not think a driver’s credit score should be used in auto insurance rates, but many insurers place great importance on credit-based insurance ratings when price fixing.
Insurers say they can correlate bad credit with a person’s chances of making auto insurance claims. Although insurance rates are regulated by each state’s insurance department, states typically allow pricing factors such as credit when insurers can show a connection to higher claims. Only California, Hawaii, Massachusetts and Michigan prohibit the use of credit in auto insurance rates.
When the Washington state insurance commissioner banned the use of credit for insurance rates earlier this year, he was immediately struck by the decline in the insurance industry and legal action. But the credit ban eventually prevailed, taking effect on June 20.
Since the use and extent of credit in rates can vary widely from insurer to insurer, a driver with poor credit could particularly benefit from shopping.
Examples of Increasing Auto Insurance Rates Based on Bad Credit
Level of education? 67% say it’s a failure
Many auto insurance companies offer education-related discounts, rewarding drivers who have earned a bachelor’s or master’s degree or doctorate. But 67% of survey respondents disagree that education level should be a factor in car insurance rates.
Still, 21% supported the idea. Insurers can include education level in rates when they have linked a graduate degree to lower claims.
Use of occupation? May be
While the use of credit or education level in auto insurance pricing was controversial, the use of occupancy was not as controversial: 44% did not believe that occupying a driver should affect fares, but 36% thought it was OK.
Like other pricing factors that do not relate to actual driving, some insurers give discounts for certain occupations. For example, lawyers, doctors and educators can get lower rates.
Monitoring of actual driving? People are divided
Usage-based auto insurance, which uses actual driving data in rates, could reduce reliance on non-driving price factors such as education. Using telematics, these insurance programs monitor and note actual driving such as speed, braking and turns.
About half (51%) of survey respondents said they would be “very comfortable” or “somewhat comfortable” to have their driving closely monitored if it could lead to lower driving rates. ‘car insurance. A smaller proportion (44%) were reluctant, expressing unease at such surveillance.
So, as auto insurance companies seek more accurate ways to assess individual âriskâ, drivers may find fewer and fewer options that do not use highly personalized metrics.
YouGov interviewed 2,000 American adults. The survey was conducted on June 24, 2021. The survey was conducted via YouGov Direct. Data are weighted according to age, sex, level of education, political affiliation and ethnicity. The results are nationally representative of adults in the United States. The margin of error is 3.0%.