By John “Okie” Doak, Oklahoma Insurance Commissioner
Financial challenges have forced many Oklahoma consumers to make lifestyle changes to adapt in the current economy. Sometimes those changes can inadvertently cost you – or save you money – on your car insurance.
The National Association of Insurance Commissioners reports that 53 percent of Americans have made economically driven life-changes in the past year that could impact the cost of their auto policy. A survey by NAIC found that the most common car choices consumers made:
- Nearly 40 percent of respondents drove fewer miles overall.
- Almost 20 percent of vehicle owners traded for a lower-priced model or got rid of the family’s second car entirely.
- Close to 20 percent of drivers reduced or cancelled their car insurance for immediate financial relief, some without realizing the effect such a decision could have on future premiums and the devastating economic consequences if they were to be at-fault in an accident while driving uninsured.
The following are some changes in personal or family circumstances and how they might impact your car insurance needs and costs:
- You Moved: By choice or necessity, many Oklahomans relocated in the past year. A change in zip code can affect your auto insurance premiums. Crime statistics, garage vs. street parking and other factors play a role. If you relocated to Oklahoma from another state, mandatory minimums for liability might be greater (or less) here than in your former state, affecting your insurance costs as well. For accuracy in your coverage and billing, it is important to update the address on your policy promptly upon relocation.
- You Changed Cars: Buying a new vehicle, “trading down” to a less expensive or more efficient model, buying a “starter” vehicle for a teen driver, and paying off one of your family’s vehicles all can be reasons for your insurance needs and costs to change. The make and model of your vehicle affects your auto insurance premium; cars with lower resale values are usually cheaper to insure. Adding a vehicle to the family could trigger a multi-car discount, while downsizing the family fleet to save money on car payments or fuel could reduce similar discounts from your insurer. Contact your agent for help determining your appropriate coverage and values.
- You Job Situation Changed: In this difficult economy, many Oklahomans have been forced to look for new work. We’ve already covered how relocating can affect your auto insurance premiums, but staying in the same home while working a different job can make a difference, too. Is your commute much longer or shorter than it used to be? Job loss and reductions in income have prompted some consumers to try canceling their insurance to save money, but that is a choice with disastrous consequences. Driving while uninsured is not only against the law, but if you are at fault in an accident while driving without sufficient insurance, a court could order the sale of your home or other assets to compensate the victims of the crash.
- You Are Driving Less: High gas prices have caused some Oklahomans to curtail their motoring, whether for work, family business or pleasure. Since your car insurance premium is partially based on your annual mileage, driving less should equal paying less.
You can also contact the Oklahoma Insurance Department’s Consumer Hotline at (800) 522-0071, or visit us online at http://oid.ok.gov.