SOURCE: Cheap Auto Insurance

September 11, 2009 19:20 ET

Recession Prompts 90% of Car Insurance Shoppers to Look for Cheaper Alternatives

SACRAMENTO, CA--(Marketwire - September 11, 2009) - Approximately 90% of shoppers for cheap car insurance say that obtaining lower insurance rates is their main goal. At least, this is what the most recent study from Google and TNS Compete are showing. Given the current economic climate, both individuals and insurance companies are looking for ways to cut back on costs and make smart choices in any market.

Interestingly enough, through comparing June of 2009 to June of 2008, the company Cheap Auto Insurance has stated that insurance rates are at the lowest points they have been during the twelve-month span. Just this summer, there was a documented 6% reduction in the cost of insurance policies compared to the previous month.

While more consumers seek lower rates, RateWatch has observed that car insurance rates are in fact 12% higher in 2009 than they were previously in 2008, but not everywhere. Likewise, states such as Massachusetts have witnessed car insurance rates dropping by 8% in the past year. States such as Alabama, Mississippi, and Ohio have witnessed drastic rate declivities in the past month; however, others, like Nebraska and Delaware, have observed slight increases in their rates.

Simply because there is an increased demand for lower insurance rates does not necessarily guarantee that each and every insurance provider will offer them. Companies such as Allstate and StateFarm have already raised their rates for homeowners insurance by about a whopping 15% in the past few months, which help offset losses for issuing cheaper car insurance.

This price increase is not just limited to home insurance. Given that credit is tight for everyone, car insurance companies are also looking for ways that they can save a quick buck. One of the easiest ways to accommodate this challenge is to raise their premiums in the hopes that rival companies will follow their lead. Home owner rates has been a success for insurance companies, and according to industry insiders, car insurance rates will also climb over the next few months. Other market factors have contributed to the rise in rates; including the rising cost of claims payouts and an increase in the number of cases of insurance fraud.

Although rates may be rising in general, it is still possible to find small and private-owned companies that are willing to negotiate prices much more than some of the larger, national corporations.

Given the economic challenges that many consumers are facing, it is unsurprising that, according to the TNS/Google study, the number of customers looking for new car insurance premiums has increased 20% in the past year. Evaluating your purchasing options through an informed perspective can help you save money in the long run, as long as you have taken the initiative to engage in the correct research. To conclude, there is no better time than the present to consider obtaining a better insurance plan.

About Cheap Auto Insurance

Cheap Auto Insurance is an organization devoted to providing consumers with valuable information and resources in their quest to find more affordable insurance rates.