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Affordable auto insurance elusive for many

October 7, 2014

Finding affordable auto insurance is becoming a bigger challenge for some Americans, according to a recent report from the Consumer Federation of America.

The organization recently stated the nation's five largest auto insurance companies do not make basic auto coverage available to safe drivers for less than $500 per year in more than 2,300 urban and suburban ZIP codes. This is especially a problem in the country's lower-income areas.

Regardless of income or employment status, every driver deserves the chance to obtain comprehensive auto coverage at a fair price.

“Our research raises important questions as to whether state-mandated auto insurance is priced fairly and is affordable for many lower-income Americans,” Tom Feltner, CFA's director of financial services, stated in a media release. “Drivers need a car to get to work or school. High insurance premiums act to deny these Americans economic opportunity and also help explain why so many lower-income Americans drive without insurance.”

According to the report, 24 of the 50 urban regions surveyed showed there was at least one lower-income ZIP code where annual auto insurance premiums exceeded $500 from every major insurer. Meanwhile, in nine of these areas—Miami/Ft. Lauderdale; Detroit; Minneapolis/St. Paul; Tampa/St. Petersburg, Florida, Baltimore; Orlando, Florida; Jacksonville, Florida; Hartford, Connecticut; and New Orleans—insurance premiums were higher than $500 in all lower-income ZIP codes.

Affordable insurance a necessity for many

CFA's focus on lower-income regions is important considering the fact that access to a car is essential for employment in many areas, and such access requires purchasing auto insurance.

“For most Americans, access to the best job for which one is qualified requires ownership of a car,” the CFA report stated. “As a result, car ownership among low- and moderate-income (LMI) households is high. According to a 2001 government survey, 65 percent of low-income households—those in the first income quintile—and 86 percent of moderate-income households—those in the second income quintile—own a car.”

However, regardless of income or employment status, every driver deserves the chance to obtain comprehensive auto coverage at a fair price. That's why SelectQuote gives car owners the ability to comparison shop and receive real-time, accurate quotes from 12 different A-rated insurance carriers.

Such a system makes weighing options and selecting the most appropriate coverage at the right price that much easier.