Today’s Wall Street Journal addresses a frequently under-discussed but crucial topic affecting motorists across the country: the rise of uninsured drivers.
I’d like to elaborate a bit more on our perspective here at Dairyland®.
In the face of economic uncertainty, millions of people are forced to make difficult financial decisions—including how to budget for auto insurance. Unfortunately, many drivers are choosing to forego auto insurance in an effort to save money. We see it every day.
The above-linked article—and the larger conversation around uninsured drivers—reinforces the importance of nonstandard auto insurance providers like Dairyland. We’re uniquely set up to help young and new drivers, individuals with credit challenges, and those who’ve been forced to take a break from car insurance in the past. We can help serve as a safety net when it’s needed.
As more drivers weigh their choices in the face of inflation and other factors, I’d like to share a roadmap for navigating today’s auto insurance market. My goal is to raise awareness of the resources and options available, so you can make the best decision for yourself—no matter who you are or the stage you’re at in life.
Why are auto insurance costs rising?
This is the question on everyone’s mind today. Over the past few years, several factors have had a compounding impact on auto insurance providers, leading to higher-than-usual rate increases. I outlined several of these factors in a Dairyland Resource Center article earlier this year.
We’ve all seen the impact of inflation in recent years, and it can’t be understated—the costs of car parts, repairs, labor, and medical bills have all increased. But inflation doesn’t paint the whole picture. Non-inflationary factors also contribute to today’s car insurance rates.
Increased traffic volume and distracted driving have led to riskier driving behaviors in recent years. Within the same timeframe, we’ve also seen roadway fatalities hit a 16-year high as recently as 2021. These factors—coupled with a rise in lawsuits and the impacts of climate change—contributed to the highest auto losses in two decades.
It’s also important to note that the car insurance industry isn’t set up to respond to day-by-day changes. Even as the United States inflation rate has slowed over the past two years, the impact on your auto insurance premiums won’t necessarily mirror that change in the short-term, since rates must be submitted, reviewed, and approved by each state.
The risks of driving without insurance
Accident costs can reach hundreds of thousands of dollars due to:
Medical bills
Car repairs
Lost wages
Legal fees and lawsuits
Without insurance, at-fault drivers may have to pay out-of-pocket for damages and injuries to both other drivers and themselves. It can turn a bad day into a life-changing setback. That’s why car insurance is required in nearly every state. It can help financially protect you and other drivers from damages following an accident.
If you’re pulled over and caught driving without insurance, you could also face the following penalties, which vary by state:
Fines
Driver's license suspension
Vehicle impoundment
Jail time
How to reduce your car insurance rates
My first recommendation is to have a conversation with your car insurance agent the next time your policy is up for renewal. They don’t want you to drive without insurance either, so they’ll work with you to figure out a solution. Here are several additional tips that can help reduce your rate:
Carry state minimum coverage requirements: Review your coverage to identify where you can adjust your limits and deductibles. You may have optional coverages that made sense when you first purchased your policy, but that no longer make sense today. By carrying your state minimum coverage requirements, you get the essentials needed to drive legally.
Explore payment plans: Ask your insurer about installment options. It can help you break the total cost of your policy into smaller, more manageable payments. As an example, we offer pay-as-you-go and variable down payment options.
Explore available discounts: Today, most insurers offer a wide range of discounts. Take advantage and ask which discounts you qualify for.
Maintain continuous coverage: While taking a break from your insurance may seem like it saves you money in the short-term, a lapse may lead to higher premiums once you resume coverage.
Drive safely: Your driving habits—and history—influence your rate. By driving safely and maintaining an accident-free record, you demonstrate a lower risk to your insurance provider, which can help lower your insurance costs over time.
Shop around: If your current insurer won’t reduce your rates, get quotes from other providers. There are many online tools that can help you compare costs.
The role of nonstandard auto insurance
You may find yourself seeking alternatives to regular car insurance providers. One of those options is nonstandard auto insurance.
That’s where we can help.
Oftentimes, people hear “nonstandard” and assume it means “high risk.” That’s not necessarily the case. Nonstandard auto insurance often acts as a safety net for drivers who have limited car insurance options. Many drivers we work with just need financial flexibility or have taken a break from insurance in the past. They’re your neighbors, your coworkers, your friends, and your family members.
The reason I'm sharing today’s Wall Street Journal article—and the reason I’m writing this now—is to help raise awareness for drivers who need an alternative. We’ve helped thousands of drivers with safe driving records who’ve simply been uninsured or inconsistently insured in the past.
When other insurers have said no, we’ve said yes.