Report: Astounding number of people live in areas where car insurance is ‘unaffordable’
For many people, the process of sitting down to create a monthly budget is always a somewhat odious task. That’s largely because it serves to remind them of all the expenses they must pay on a regular basis, and just how inconvenient it is to have to remit a not insubstantial check or credit card payment every month.
A prime example of this would be a car insurance payment, which always seems to be due and always seems to be inching ever higher. Interestingly enough, a recently released, first-of-its-kind government study found that for a vast number of Americans, car insurance payments are perhaps far more than just an inconvenience.
Last Friday, the U.S. Treasury Department’s Federal Insurance Office, created back in 2010 under the landmark Dodd-Frank financial reform law, released the results of a study that set out to examine just how many people live in areas where car insurance is “unaffordable,” meaning it costs more than two percent of the median household income in a given zip code.
After examining both premium and population data, the FIO determined that an astounding 19 million people reside in areas with unaffordable car insurance rates.
Breaking the numbers down further, the study found the following:
- Car insurance is unaffordable in 845 different areas as defined by postal codes
- Over 40 percent of the people living in areas with unaffordable car insurance can be found in the tri-state region of Connecticut, New Jersey and New York
- The states with most people with unaffordable car insurance were New York (5.2 million), Florida (2.8 million), New Jersey (2.3 million), Michigan (1.7 million), Pennsylvania (1.1 million) and Texas (873,000)
As to the consequences of these findings, the FIO indicated that when auto insurance costs are too high, people are often forced to forfeit driving altogether, leaving them at a real disadvantage when it comes to economic opportunities, particularly employment.
Here’s hoping this report gets the attention it deserves from lawmakers at all levels.
Source: Reuters, “Nearly 19 mln Americans live where car insurance is unaffordable-study,” Suzanne Barlyn, January 23, 2017