Affordable Automobile Insurance

A study mentioned on our website a few days ago talked about how the trend of children staying in their parents’ home longer and sharing their automobile insurance policies for longer is increasing due to economic downturn. When you talk to some affected parents and young adults, you end up getting a deeper insight into the world they are living in and harsh realities faced by them.

One such youngster in his early 30s says that his undergraduate and graduate education fees was paid by his parents, and that he had to provide detailed account of his expenses to his parents. That way he learnt to live within his means. His friends who were allowed to spend lavishly are still dependent on their parents. Many of these youngsters have iPhones, expensive clothes, go for vacations and spas, it’s only natural that people expect them to pay for their automobile insurance and rent.

A person from baby boomer’s generation says that living standards are on a gradual decline. Even those houses which were considered modest earlier are now out of the reach of present generation. There is a general feeling that wages for the majority are not matching with the current cost of living and that affordable automobile insurance has become a distant dream now.

Those who get to interact closely with dependent adults, say these are people extremely deficient in elementary life stills. Many of them don’t even know how much does a car cost even though they are going to buy one. When they are buying an automobile insurance policy, they don’t know how to do comparison shopping. They never think twice before buying an expensive concert ticket, but are unable to save money to pay for their apartment security deposit. If they get a job below their skill set, they refuse but they can play Xbox games gladly for hours uninterrupted.

California witnessed about 25% increased in automobile arson fraud in the last year, says the California State Commissioner. He further said that there has been marked increase in automobile insurance fraud in an effort to get more insurance money. It is believed due to financial challenges being faced by the people due to economic downturn; they are committing insurance fraud to get access to some quick money. Investigators suspect that many car arson and theft cases are actually fraud related, and the enforcement experts are making sure anyone trying to cheat insurance companies is caught.

The suspected fraud cases are referred to the Department of Insurance by insurance companies. Every suspected case is very carefully examined by the officers.
Overall, there were about 300 additional automobile theft and arson cases in 2008, whereas about 200 additional automobile theft cases were referred to department in 2008. Although the total number of referred fraud cases remains the same, only arson and theft referrals have increased substantially.

Insurance frauds are a major financial problem for both consumers and insurance carriers. According to National Insurance Crime Bauru report, insurance frauds send the industry back by about $ 30 billion every year. Every American household faces, on an average, the cost of $300 every year due to higher insurance premium charged to compensate losses caused by accident staging. Whenever an insurance company loses money due to false claims, the losses are passed on to the customers by increasing insurance premium. About 90% insurance fraud loses are due to claims padding, in which those who have filed the claim add injuries, damage, non-existent passenger in their claims. Rest of the losses comes from organized accident staging groups. It is difficult to pursue these crimes since these are not a priority among enforcement officers. Even insurance companies believe they can not stop this practice, and they simply transfer the cost to the consumers paying the premium.