According to a recent survey, US consumers have considered reducing or even eliminating their insurance coverage as they seek to cut costs amid economic pressures.
More than half (53%) of Americans rated their financial condition between “poor” and “fair” as they battled headwinds inflation and rising interest ratesaccording to the national survey.
As a result, consumers have cut spending in several areas, including 38% who said they eat out less often and 32% who said they buy cheaper products than those they normally use. More than half (56%) said they are also looking for ways to save on their auto and home insurance.
“Cutting coverage to save money is a short-term fix that can lead to long-term financial problems if something were to happen,” said Beth Riczko, president of property and casualty insurance at Nationwide. “Consumers looking for ways to save money should speak to their insurance agent to ensure their policy best meets their current needs to protect them from unexpected problems.”
If you’re looking for ways to save on your home or car insurance, comparing multiple insurance companies can also help you find the best deal. You can visit Credible to look around and find the best option for you.
ARE CAR INSURANCE PREMIUMS RISING? blame inflation
Consumers brace themselves for an economic downturn
71 percent of Americans are concerned about a possible recession and economic downturn in the US, according to Nationwide poll. More than half (54%) also said inflation and the rising cost of living are having a negative impact on their mental health.
According to the Bureau of Labor Statistics (BLS), the latest consumer price index (CPI), a measure of inflation, rose 8.2% annually in September, slightly less than the 8.3% increase in August. The report also showed that housing, food and medical costs increased in September.
Accordingly, household insurance rates rose by 12.1% annually in May compared to the previous year political genius. And the cost of car insurance rose 19% annually in September, figures from reported consumer affairs.
“Consumers understandably feel financially vulnerable due to escalating economic pressures,” said Ben Ayers, Nationwide’s senior economist. “And they lack a clear understanding of how best to prepare and arm themselves for prolonged financial instability.”
If you’re looking to lower your insurance costs, you can visit Credible to compare the premiums of multiple insurance companies and find the best option for you.
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Which insurance factors to consider
Many Americans have considered cutting insurance plans to save money, not realizing that doing so “can result in greater financial losses in the future,” Nationwide said. Regarding insurance coverage, the company advised consumers to consider the following factors:
Insure your property at market value
According to Nationwide, consumers should make sure their insurance coverage keeps pace with rising home values. It is estimated that two out of three households are currently underinsured by an average of 27%, the company said.
“What used to cost $300,000 to rebuild could cost $350,000 today,” said Jarett Dunbar, a spokeswoman for Nationwide. “As a result, customers may be underinsured, potentially leaving them vulnerable in the event of a claim.”
Bundle homeowners and auto insurance together for savings
In order to have an insurance package, a policyholder must have more than one type of policy with the same insurance provider. Combining home and auto insurance plans could give policyholders a discount.
Data sharing devices can help earn rebates
Consumption-based insurance allows consumers to base premiums on how much or how safely they drive. Companies calculate this by monitoring driver behavior, either through a mobile app or a device installed in the vehicle.
For example, according to Policygenius, drivers can save an average of 20% on their insurance by installing connected devices, smartphones or an automaker’s mobile app to monitor and report details of driving habits.
Some insurance policies may offer safe driver discounts through telematics options or based on your driving record, while others offer young driver discounts. To help you find the best insurance plan for your situation, you can visit Credible to compare multiple providers at once and choose the right option for you.
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