5 reasons drivers don’t buy a car insurance policy

It’s illegal in the United States to drive a vehicle without the proper insurance, so why would drivers do it? Learn the reasoning behind the uninsured epidemic.

Auto insurance isn’t only required by law in all 50 states, it’s something every smart driver should have — at the right coverage amount too. So how does almost 13% of the U.S. population drive around us everyday without owning an insurance policy? There may be some pretty logical reasoning behind this bad decision.

Why don’t people buy car insurance?

Below are some of the most common reasons people who need auto insurance decide not to buy it or buy too little, leaving them underinsured.

    1. It’s expensiveIf driving without insurance is illegal, why do such a large percent of the population do so? Well, there seems to be a direct relationship between the number of uninsured motorists and the financial strength of the U.S. economy. The prosperous economy of the mid-2000’s caused a drop in the number of uninsured motorists. When times are good, budgets aren’t as tight. However, since the recession began in 2008 there has been a steady increase in the number of drivers on the road without coverage. People are willing to risk the penalties of driving without insurance in order to save money right now. But just how much money are we talking?

      According to the National Association of Insurance Commissioners, the average amount spent on car insurance in the United States is $846 a year. Add that to the average annual cost of living expenses including housing, food, utilities, etc. and suddenly your bills for these resources pile up and take priority over intangible things like car insurance. Individuals who think insurance is too expensive and therefore avoid fitting it into their budgets usually do a dangerous kind of prioritizing that can leave them underinsured or over insured.

      Consumers hear so often, whether through conversations or online research, that insurance is expensive. Taking this verbatim creates an industry of mindless consumers who either pay more for coverage than is necessary or who put themselves at risk by purposely buying very little coverage. Many individuals are unaware that some state governments offer low income car insurance.

    2. It’s time consumingThe misconception that car insurance has and always will be expensive is fueled even further by the lack of transparency between coverage and carrier options within the car insurance industry online and over the phone. According to a NerdWallet survey, a whomping 88% of drivers feel that shopping for car insurance is a time consuming and frustrating experience. Drivers find it uncomfortable to give away private information online or to an agent only to find it so difficult to compare quotes on one site.

The frustration pushes consumers to choose policies quickly and unintelligently just so they can be done with the process. This leaves 4 out of 5 drivers are paying too much for car insurance due to unclear saving opportunities–estimated to be around $368/year. Many drivers are unaware of quote comparison sites, like Insurify, that allow them to build, customize, compare, and purchase a policy online in minutes with the help of insurance agents via chat, email, or telephone.

  1. Lack of trustThere are many reasons why someone might not trust their insurance agent or company. While some consumers’ feelings of suspicion come from poor customer service experiences with past carriers, many people just feel that insurance company’s flashy advertisements become lost in translation. Drivers don’t purchase insurance to be wowed, they purchase it to protect and secure their finances and assets. So while agents are busy trying to sell, customers just want to know that their needs are being understood and met with frequent communication between agent and client.
  2. Complicated jargonMany consumers simply don’t have confidence in a product they don’t understand. Insurance policies, whether they be for life, homeowners, or auto, are intangible products with their own sets of complicated terms and exceptions. Policies are even more confusing if there’s little contact between customers and agents. When consumers are confused and feel like they’re not being helped or benefitting from the insurance, they don’t see the point in keeping the policy. After all, while would they spend money every month for something they don’t think that they’re using?
  3. Invincibility complexIt’s a given that nobody wants to think about getting into a car accident. But, the reality is that drivers need to prepare for the worst in order to protect themselves, their savings, and their assets. Out of 210 million drivers in the United States alone, there are an average of 5.25 million car accidents every year. One of those accidents could likely involve you and your vehicle. And if you or the other driver don’t carry insurance or uninsured motorist coverage, the accident could lead to serious debt.

    Many drivers are unaware that they’re underinsured until it’s too late and they’re faced with piling debt due to medical and mechanical payments. It’s important to find an insurance company that covers all of your needs before you actually need them.

Micaela Allen is a Boston-based writer and editor. Over the years, she has written over 100 original pieces for Insurify, focusing on trends in the insurance industry and financial advice for young and uninsured drivers. Micaela is an alumna of Northeastern University, where she majored in English.