Why your clients may want to change their auto coverage now
There’s a 37% chance your clients are making changes to their driving routines, and that means they may need to update their auto coverage, according to a recent survey by RatesDotCa.
Canadians who are planning to make changes to their current driving routines are doing so by driving less to save on gas, delaying car repairs, or even downsizing their vehicles due to affordability, according to the survey commissioned by the rate aggregator and conducted by Leger.
Saving money
Of particular concern to insurers, 13% of drivers between 18 and 54 years old say they would consider forgoing vehicle maintenance and repairs for their cars. “This is also the group most likely to spend more than $750 per month on their cars, at 16%,” RatesDotCa says.
Since repair costs have skyrocketed thanks to supply chain disruptions, it’s understandable why consumers might take this cost-saving approach. But it could elevate their risk profile in the view of an underwriter.
Post-pandemic, insurers have seen the traffic resume to patterns seen before the pandemic. But figures in the study suggest the levels may not elevate to previous levels in part because of the economy and the price of gas.
Of the 27% cutting back on driving to save money on gas, “this attitude is consistent with drivers of all ages” regardless of their incomes or expenses, RatesDotCa reports.
Rising demand, supply chain disruptions and government policy are all driving gas prices upward, and it’s costing consumers more than they can afford, the quote aggregator writes.
However, a vast majority of those living in rural areas (85%) don’t have accessible public transportation, meaning it may be more difficult to cut back on driving, compared to their urban counterparts (64% lack access to transit).
About 5% of those surveyed said they planned to switch to a cheaper car to save money, though the number is higher for those under 55 years old (7%).
With that, another 4% of respondents are planning on selling their cars altogether.
“Some Canadians may transition to smaller vehicles, hybrids or electric cars, thereby reducing their financial impact without undergoing significant lifestyle changes,” RatesDotCa writes.
Driving as usual
Despite many Canadians considering ways to save on auto costs, there’s a large portion of consumers for whom driving is still a part of their daily routine.
Fifty seven per cent of respondents are not considering changes to their driving habits. Yet, of that group, 63% of them are over age 55. Another 64% of them spend less than $500 a month on their cars, which might explain why they don’t feel the need to pinch pennies.
Of this group, 63% are also considered to be high earners ($100,000 or more in income).
Just over half (51%) of people who earn less than $60,000 per year report they’re not making any changes to save money on their cars.
Feature image by iStock.com/Rattankun Thongbun
