U.S. consumers have considered reducing or even dropping their insurance coverage as they seek to cut costs amid economic pressures, according to a recent survey.
As a result, consumers reduced their spending in several areas, including 38% who said they ate out less often and 32% who said they bought cheaper products than they usually use. More than half (56%) said they were also looking for ways to save on their car and home insurance policies.
“Reducing insurance coverage to save money is a short-term solution that can lead to long-term financial problems if something were to happen,” said Beth Riczko, president of Nationwide’s property and casualty insurance. “Consumers looking for ways to save money should speak with their insurance agent to make sure their policy can best meet their current needs to protect them from any unexpected issues.”
If you’re looking for ways to save on your home or auto insurance, comparing multiple insurance companies can also help you find the best rate. You can visit Credible to shop around and find the best option for you..
Consumers brace for an economic downturn
Seventy-one percent of Americans are worried about a possible recession and economic slowdown in the United States, according to the Nationwide survey. More than half (54%) also said inflation and the rising cost of living had a negative impact on their mental health.
The latest consumer price index (CPI), a measure of inflation, grew 8.2% annually in Septembera little less than the 8.3% increase in Augustaccording to Bureau of Labor Statistics (BLS). The report also showed housing, food and medical costs rose in September.
Home Insurance rates rose 12.1% a year in May from a year ago, according to political genius. And the cost of car insurance rose 19% a year in September, according to figures reported by consumer affairs.
“Consumers understandably feel financially vulnerable due to escalating economic pressures,” said Nationwide senior economist Ben Ayers. “And they don’t have a clear understanding of how they can best prepare and prepare for continued financial instability.”
If you are looking to reduce your insurance costs, you can visit Credible to compare premiums from multiple insurance companies and find the best option for you.
What insurance factors to consider
Many Americans have considered cutting insurance to save money, not realizing that doing so “could lead to greater financial losses in the future,” Nationwide said. In terms of insurance protection, the company recommended that consumers consider the following factors:
Insure your property at market value
Consumers should ensure their policy coverage keeps pace with rising home values, according to Nationwide. It is currently estimated that two out of three households are 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 Nationwide spokesman. “Because of this, customers may be underinsured, making them potentially vulnerable in the event of a claim.”
Bundle homeowners and auto insurance to save
To have an insurance package, an insured must have more than one type of policy with the same insurance provider. Combine auto and home insurance could grant a discount to policyholders.
Data sharing devices can help earn discounts
Usage-based insurance allows consumers to base their premiums on how much or how safe they drive. Companies calculate this by monitoring driver behavior, either through a mobile app or through a device installed in the vehicle.
For example, drivers can save an average of 20% on their insurance by installing connected devices, smartphones or a mobile app from the automaker to monitor and report details about driving habits, according to political genius.
Certain insurances 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 rate for your situation, you can visit Credible to compare several providers at once and choose the right option for you.
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