Why Isn’t Car Insurance More Affordable?
Q: I’ve heard of people that drive without insurance causing accidents and expensive damage because they couldn’t afford the premiums. Why is it that car insurance isn’t more affordable so people don’t have to drive without it?
AIS Answer: Until auto insurance is subsidized by the U.S. Government or individually by each state, it will always be expensive for some people. Sure, there are some states that offer subsidized low cost plans like California’s Low Cost Insurance Program and New Jersey’s $1 a day auto insurance program, but the reality is that a small percentage of people actually qualify for these programs, and there aren’t a lot of states doing this.
Auto insurance companies as stated numerous times on this site, are companies built on making a profit. Not unlike any company that goes into business. Since an insurance company is in business to insure against the certain losses, they have to calculate risk accordingly. Otherwise, they could end up being very unprofitable charging customers the wrong amount for their assessed risk.
This answer in one form or another has been covered on this site multiple times and the bottom line is, high risk drivers pay more than low risk drivers. There are so many variables to the high risk and low risk equation that it’s nearly impossible to estimate how you’re going to be profiled from one insurance company to the next, and without all of the specific information needed to make the assessment it would be unrealistic to try.
Auto insurance in all its intricacies was never meant to be fair, it’s a for profit business model. The business in itself is wildly profitable because of properly calculating risk, and often, this is at the expense of younger and higher risk drivers, but, it’s not a bias to anything more than specific data that proves high risk drivers are more expensive to insure than low risk drivers.
In the end, drivers that chose to drive without auto insurance are doing so because they can’t or don’t want to pay for it - and that is the drivers responsibility and obligation to everyone else on the road that carries proper auto insurance. An insurance company is not going to feel sorry for them, and the law certainly will not either. As stated directly at nearly every DMV location “Driving is a privilege not a right”. To drive without auto insurance is not only illegal, but incredibly irresponsible - no matter what excuse or reason given.
Ultimately, driving without auto insurance is a battle you will not win. The laws will not change, insurance companies cannot afford to change, so this leaves the driver only two options. Insure your vehicle, or sell it and quit driving.
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Seattle car insurance is bad too…ughhhh. I mean, it’s not new york, or san francisco, but with the number of people we have here and the congestion you’re flat out going to pay a lot of money to drive.
I can see why people want to drive without insurance…actually, why they don’t want to pay for car insurance, but it’s really important. I agree…if you can’t afford car insurance, you can’t afford to drive and need to find other ways to get around…I hear that’s why they have buses.
try New York City. There’s a reason people don’t drive there and take cabs. My friend said that you had to have full coverage on your car no matter what it cost just to drive in NY. Not sure if that’s true, but she sold her car because her insurance cost more than her car.
probably the same reason that cars aren’t more affordable. Everything goes up in prices, it’s called inflation.