Many motorists choose to reduce the level of protection to face the monthly insurance fee.
In the midst of an economic context marked by inflation and the fall of purchasing power, the car insurance market is going through an accelerated transformation. More and more conductors are checking what type of coverage they pay and, in many cases, reducing the level of protection to face the monthly fee. The trend, which has been observed for several months, reflects the need to cut fixed expenses due to the pressure of other increases such as fuel, tolls and maintenance.
According to recent data from the insurance sector, a large motorist majority decided to modify their policy during the last year. The most repeated pattern is the passage of Insurance “All Risk” or broad coverage to more basic optionssuch as completely third or even simple third parties. The change implies a lower monthly premium, although it also reduces the scope of protection in case of incident.
The sector data activated alarms. About 60% of motorists chose to change their insurance coverage for a cheaper option to lower costsrevealed a report by the Association of Argentine Insurers (ADEAA).
Compare prices before hiring insurance
Companies agree that The current client is much more aware of comparing prices and conditions. Before, the annual renewal of a policy was almost automatic; Today, on the other hand, the insured ask for budgets in several companies before deciding.
The adjustment not only responds to the increase in quotas, but also to the rise in the insured values. With inflation and increase in the price of new and used cars, insurers update the most frequently secured sums. This causes that, even without changes in coverage, the monthly premium is significantly more expensive.
Insurance producers and brokers indicate that, although the need to reduce expenses is understood, it is important to evaluate well what is resigning when it goes to more limited coverage. For example, Simple third party insurance does not cover vehicle’s own damage in case of an accident, which can imply very high unforeseen expenses. In that sense, They recommend analyzing not only the price, but also the level of support necessary according to the use given to the car.
The trend is also promoting companies to offer more flexible plans. Some developed modular coverage that allow customizing the policy and paying only for certain risks, while others launched promotions with discounts for annual payment or automatic debit.
In any case, the phenomenon reflects a scenario in which the surehistorically considered an inevitable fixed expense, begins to enter the list of cuts of many homes.
Source: Ambito
I’m a recent graduate of the University of Missouri with a degree in journalism. I started working as a news reporter for 24 Hours World about two years ago, and I’ve been writing articles ever since. My main focus is automotive news, but I’ve also written about politics, lifestyle, and entertainment.
