Recent Changes In Nationwide Auto Insurance Coverage
Recent nationwide changes have had a tremendous effect on the car insurance market. The cost of auto insurance coverage has typically fluctuated from year to year, and while it can be difficult to pinpoint a reason for rate changes, there are a few factors that have almost certainly had a major effect on costs.
One of the biggest recent nationwide changes has been an increase in the number of potential traffic violations as a result of federal and state legislation. Distracted driving laws are a notable example; these laws penalize drivers who write or read text messages while driving, as well as other drivers who aren't focused on the road. Auto insurance companies have pushed for these laws, as they allow insurers to better determine which drivers are most likely to be involved in accidents. Other important laws include measures in states like California to limit the types of discounts that car insurance companies can apply. These laws are intended to protect consumers, as some discounts could be potentially discriminatory. For instance, discounts for drivers with good credit ratings could discriminate against blue collar workers. Many states are exploring legislation to control discounts, and while these types of laws may eventually lead to lower costs, they've currently raised the average cost of insurance nationwide and especially in their states of origin.
The economy has also had a major effect on car insurance costs. Tough economic times generally lead to higher-than-average car insurance rates. However, when a poor economic period has been prolonged for over a few years, there are fewer drivers on the road--many students and other drivers simply stop driving as they can't afford their insurance and gasoline bills. Fewer drivers can make insurance companies more desperate for business, and this can have the opposite effect. Auto insurance quotes are fairly low right now compared to where they were several years ago, but it's difficult to predict how they'll react if the economy continues to struggle.
Other recent nationwide changes include changes to how insurance companies decide rates. Insurance providers are looking at drivers' credit ratings and other types of criteria to decide which drivers are high and low risks. As mentioned earlier, some states have challenged these practices, but insurers probably won't stop using whatever methods that they can to appropriately assess drivers' risks unless they're legally forced to change their pricing methods. For drivers, this means that it's more important than ever to shop around before buying a car insurance policy and to keep re-checking rates every few months. It's the best way to avoid an overpriced policy without settling for poor auto insurance coverage.
