The economy has been a real roller coaster ride lately. One day it is up, the next day it is down, and there is no telling when it is going to steady itself out. The worst part is that there are still long-tail effects that we cannot accurately predict, and those effects are hitting us in every area of life where money changes hands. That includes small businesses, the stock market, and even auto insurance.
The Good News and Bad News on Deferred Payments
If you want to retain customer loyalty through uncertain times, you have to make a few concessions and let the people who support your business know that you support them, too. In the insurance industry we have seen companies make efforts to help their customers out in a number of ways. One example is refunds. Because people have been doing less driving lately, some insurers are paying their customers back for those weeks where they were not spending much time on the road.
Another measure insurance companies are taking: Deferred billing.
This is great, because it means that if you are having a slow month at work due to the ongoing crisis, you have one less bill to worry about at the end of the month. But those bills will pile up, and they will have to be paid someday. Maybe your insurer will not be charging you any late fees or interest, but when you wind up with several months of bills to pay all at once, that can be a major expense.
Some drivers are reducing their coverage to keep those bills low; others will simply stop driving until everything sorts itself out. Others will drop their coverage entirely but stay on the road.
Minimum Recommended Coverage
The national average rate for uninsured drivers is generally around 10% to 15%. In Wisconsin, we come in at the higher end of average, at 14.3%. Not the best, but far from the worst. So, some basic uninsured motorist protection is part of your state minimum, but underinsured motorist insurance is not included.
So far, so good. For many drivers, that is a risk we are willing to take. If you are in an accident, the odds are better than 85% that the other driver is carrying insurance, right? Or at least, that is how it has been in the past.
There is no telling how high that 14.3% will spike, but it is going to spike when those deferred payments come due.
So the question right now is whether the minimum recommended coverage is going to be enough. At present, the mandatory minimum, and typical recommended minimums, are based on information that is going to become outdated in the coming months quickly.
In more ways than one, we need to take a second look at how we look at the world. We need to reconsider how we evaluate the risks we are taking, and how we can better prepare for the hazards we are going to encounter out on the open road.
If you have any questions you’d like answered, or if you’re looking to get better protection than you’re getting from your current auto insurance, get in touch with us at innovante insurance. Pewaukee, WI may not have one of the highest uninsured motorist rates in the country, but give it a few months, and it is hard to tell how those numbers will look come September. Drive safe and be prepared.
