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From changing jobs to moving to a different house to downsizing vehicles, Americans have made decisions during the recent economic downturn that impact unexpected areas of their life – like car insurance. In fact, in the past year 53 percent of Americans have made an economic-driven change that could impact the cost of their car insurance, according to a survey by state insurance commissioners.

The National Association of Insurance Commissioners (NAIC) survey found the most common car-related, money-saving lifestyle changes consumers made in the last 12 months that could impact their insurance costs were:

  • Nearly 40 percent of respondents are driving less overall and/or taking public transportation more frequently.
  • Close to 20 percent of car owners traded in a vehicle for a lower-priced model or got rid of a second vehicle entirely.
  • Almost 20 percent of drivers have reduced or cancelled their car insurance coverage for immediate financial relief.
  • Many consumers relocated over the past year.

The survey identifies five trends and their effects on auto insurance premiums:


Where insureds live can impact premium, depending on crime statistics in the area. Garage versus street parking can also impact premium.

Moving to another state can affect costs as states vary in their minimum liability, and perhaps no-fault, coverage requirements – some allow injured parties to sue for damages and others are no-fault states.

Changing Vehicles

Whether purchasing a less expensive or more expensivecar, looking for a hybrid to save on gas, paying off a current vehicle, or purchasing a “starter” car for a teenage driver, insureds should expect car insurance rate changes. The make and model of a car affects a premium.

A car with a lower resale value is usually cheaper to insure because collision and comprehensive coverages cost less.

Paying off a current vehicle may allow an insured be select a higher deductible or eliminate collision coverage.

Adding a car to a household may make a customer eligible for a multi-car discount.

Changing Jobs

With unemployment still hovering around nine percent, many consumers have been looking for jobs. Some have had to create flexible work situations or even to relocate. Others remain unemployed and struggle to make ends meet. Each of these unique situations can have an impact on car insurance costs:

Some consumers now have a longer or shorter commute after turning to occupations they could do from home, or relocating for a job.

Others chose to stop payment or cancel car insurance. Causing an accident without adequate insurance protection could have devastating financial consequences in the event of an accident. Further, this decision will likely result in higher costs if insurance is reinstated in the future. When coverage is allowedto lapse, customers lose renewal/continuous coverage discounts, and when they choose to reinstate the policy, the insurer may consider them a higher risk.

Driving Less

Since a car insurance premium is partially based on annual mileage, driving less equals paying less. According to the NAIC survey, almost 40 percent of consumers drove fewer

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