When Insurance Costs Shouldn’t be Cut

Car insurance can take a huge bite out of the budget and people may be tempted to lower their costs by reducing or eliminating certain coverage. The concern of motorists is understandable. According to the Consumer Price Index, insurance costs increased by an average of 16.9 percent overall as of May 2021, despite more people working from home and traveling less due to the pandemic.

Insurance Costs

Before rushing out to cut their coverage, it’s important for people to know when to reduce costs and when to maintain a higher level of coverage. Car insurance is based on a variety of factors and savings will vary depending on the insurer. Begin by scrutinizing the existing policy.

10 Percent Test

People typically rate the value of their vehicle significantly higher than it’s actually worth. A good rule of thumb is to check the Kelley Blue Book value. If the yearly insurance cost exceeds 10 percent of the car’s value, opt to reduce the dollar amount of coverage. The greater the value of the vehicle, the more individuals will need to carry higher protection rates.

Young Drivers

Any household with a young driver shouldn’t reduce their coverage. Young drivers aged 16-20 are more likely to have a catastrophic accident than older individuals. Additionally, many youths work part-time after school. Most teen deaths due to accidents occur between 9 p.m.-midnight and it doesn’t matter whether they were driving or another teen. The statistics are still terrifying for parents.

Uninsured Motorists

Individuals that live where there’s a significant number of uninsured drivers should maintain as much coverage as possible. In 2019, Florida was rated No. 6 in the nation for the number of uninsured drivers.

Distance Driven

The farther the distance that people must travel to work and access supermarkets, healthcare or entertainment, the more likely it will be that drivers are involved in an accident. Also, there’s a direct correlation between the mileage on a car and its value. Anyone that drives over 20,000 miles each year shouldn’t skimp on their car insurance.

For more information about how The Sena Group can help you with any

of your insurance needs, please contact us at 561-391-4661.

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The Sena Group
6501 Congress Ave., Ste. 100
Boca Raton, FL 33487