Given the tough economy, consumers seem to be adjusting their auto insurance coverage to their finances, according to the study. And they're willing to take some risks in doing so:
- Attempts to save money by dropping optional types of car insurance coverage (like collision and comprehensive) have been on the rise since 2006.
- Those who did buy these optional types of coverage increasingly opted for higher deductibles.
- The percentage of older vehicles (10 years old or older) without collision or comprehensive coverage climbed from 53 percent in 2006 to 63 percent in 2010. This yielded an average savings of $19 a month. Meanwhile, those with newer cars were much more likely to get extensive coverage.
On the other hand, these drivers may be putting themselves at risk. Progressive recommends thinking carefully about whether you could afford to suddenly replace your car. If you don't have much money saved up, that settlement from your insurance company, even if it's just $500, could be make the difference in your ability to afford a new set of wheels. Moreover, if your car isn't totaled but needs major repairs for a busted fender, dented door, shattered windshield or warped chassis, would you be able to pay a high deductible out of pocket?
There is no one-size-fits-all solution for choosing the right auto insurance coverage. Before taking a gamble by making coverage cuts, consider how much money you have set aside, the value of your car and the amount of risk you're willing to take.