According to a recent survey, US consumers have been considering reducing or even dropping their insurance coverage as they try to cut costs due to economic pressures.
More than half (53%) of Americans rated their financial status between “poor” and “fair” as they battle the headwinds of inflation and rising interest ratesaccording to the national survey.
As a result, consumers cut back on spending in several areas, including 38% who said they eat out less frequently and 32% who said they buy cheaper products than they normally use. More than half (56%) said they also looked for ways to save on car and homeowner insurance policies.
“Cutting insurance coverage to save money is a short-term solution that can lead to long-term financial problems should anything happen,” said Beth Riczko, president of Nationwide’s personal property and casualty lines. “Consumers looking for ways to save money should speak to their insurance agent to make sure their policy can best meet their current needs to protect them from any unforeseen problems.”
If you’re looking for ways to save on your home or car 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.
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Consumers prepare for an economic downturn
Seventy-one percent of Americans are worried about a possible economic downturn and recession in the United States, the Nationwide poll says. More than half (54%) also said that inflation and rising cost of living had a negative impact on their mental health.
The latest consumer price index (CPI), a measure of inflation, rose 8.2% annually in September, slightly less than the 8.3% increase in August, according to the Bureau of Labor Statistics (BLS). The report also showed that costs for housing, food and medical care increased in September.
Home insurance rates rose 12.1% annually in May from a year ago, according to Political genius. And the cost of auto insurance rose 19% annually in September, according to data reported by Consumer policy.
“Consumers understandably feel financially vulnerable due to mounting economic pressures,” said Ben Ayers, senior economist at Nationwide. “And they don’t have a clear understanding of how they can best prepare and prepare for continuing financial instability.”
If you’re looking to cut insurance costs, you can visit Credible to compare premiums from multiple insurance companies and find the best option for you.
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What insurance factors to consider
Many Americans have considered cutting insurance to save money without realizing it “could result in greater financial loss in the future,” Nationwide said. In terms of insurance protection, the company recommended consumers to consider the following factors:
Insure your property at market value
Consumers should make sure their insurance coverage keeps pace with rising home values, according to Nationwide. It is estimated that two out of three homes are currently underinsured by an average of 27%, the company said.
“What once cost $ 300,000 to rebuild could cost $ 350,000 today,” said Jarett Dunbar, a spokesperson for Nationwide. “For this reason, customers could be underinsured, making them potentially vulnerable in the event of a claim.”
Bundle homeowners and auto insurance for savings
To have an insurance package, an insured must have more than one type of policy with the same insurer. The combination of home and auto insurance plans could offer policyholders a discount.
Data sharing devices can help earn discounts
Usage-based insurance allows consumers to be based on how confident or how safe they drive. Companies calculate this by monitoring driver behavior, via a mobile app or 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 car manufacturer to track and report details on driving habits, according to Policygenius.
Some insurance policies may offer discounts for safe drivers via telematics options or based on your driving record, while others offer discounts for young drivers. To help you find the best insurance rate for your situation, you can visit Credible to compare multiple providers at once and choose the right option for you.
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