Shopping For Cheap Car Insurance Explodes In 2009, While Insurance Companies Resist |
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Jackie Chan
8 July 2009
According to recent research from Google and TNS Compete, 90% of car insurance shoppers are out shopping in hopes of getting lower car insurance rates. With the way the economy has shifted over the last couple of years, and people are looking so save every last penny, it's no surprise that shoppers have largely replaced the goal of buying a new car with the goal of getting cheap car insurance.
But buyer beware as insurance rates are cyclical, and are not always improving as companies like Allstate and StateFarm hiked homeowners insurance rates 15% on average last month. Just because more people are shopping for cheap insurance, doesn?t mean that all companies are providing it. This rise in home insurance rates can easily offset other insurance savings if not carefully watched. As credit is tight and investments held by insurance companies have soured, that car insurance companies are working hard to save money too. This gives them some incentive to raise rates, and hope their competitors do the same. So while shoppers may work hard to save a buck, insurance companies are trying hard to get that buck back somehow.
Nationally, June saw a 6% drop in insurance premiums, as compared to May. Some states like Massachusetts have seen an 8% drop in car insurance rates since last year. Even though the number of people seeking cheap car insurance is on the rise, car insurance rates are actually 12% higher in 2009 overall than they were in 2008 [RateWatch]. But comparing June of this year, to June of last year, and you will find that rates are at their lowest point in over a year [CarInsurance.com]. Some states like Alabama, Mississippi, and Ohio have seen dramatic rate drops this month, while others such as Nebraska and Delaware have seen moderate increases.
The general rate increases are due to factors such as rising costs on claims payouts, and the rapidly growing number of insurance fraud cases. Otherwise honest drivers, desperate to rid themselves of their car payment, are doing all sorts of things to try to total their vehicle and make it appear accidental. Creative approaches that some have taken include: setting them on fire, driving them into lakes, faking their theft, or even parking them in the direct path of a tornado.
While these rate increases are general, you may find that smaller companies are more willing to work with you on price than some of the bigger national companies. When you're armed with the right information, shopping for car insurance will go more smoothly and you'll be much likelier to find better rates than you would going into the situation completely uninformed. Understanding which factors come into play when an insurance company quotes you a car insurance policy is incredibly important.
It?s no surprise that the number of people searching for car insurance is up 20% this year over last year, as switching ones car insurance is much easier than ridding themselves of a car payment. Being a savvy shopper can help you to find great discounts, but only if you do your homework. There has not been a better time in 2009 for consumers to try to lock in lower insurance premiums.