Upfront Auto Insurance Costs Found to Be Constrained by State Law

    RANCHO CUCAMONGA, CA, November 23, 2010 /24-7PressRelease/ -- With consumers' pockets still tight as a result of the struggling economy, some motorists might be deliberating the dicey decision to ditch their car insurance coverage in order to sidestep an upcoming lump-sum premium payment. These consumers wouldn't be alone. According to researchers, fluctuations in the number of motorists who drop their coverage and drive uninsured correlate strongly with the rises and falls in the unemployment rate. By that rationale, the national uninsured motorist rate has been projected to be reaching its highest point in at least 21 years.

But there are much safer options for motorists who understand the serious risks involved with driving uninsured but who also cannot find the money for a lump-sum premium bill. Although finding car insurance with no down payment required may prove hard, or even impossible, to find, there are plenty of companies out there that will be able to provide affordable policies with monthly billing plans and low up-front costs.

How much those up-front costs will be, though, depends in part on state law. In Texas, for instance, consumers are legally entitled to the option of paying for an auto insurance policy in installments. And according to the consumer bill of rights written by the state agency that regulates insurers, the "initial down payment cannot exceed the cost of two months' coverage."

Source: http://www.insurance.tx.gov/rules/bor-auto-english.html

But Florida regulators, on the other hand, have since the mid-1990s required insurers to collect an amount at least equal to two months' premiums up-front from new customers, whether they're issuing a policy with an installment plan or not.

There's a reason that Florida and other states require insurers to collect some portion of the premium from policyholders (and why states like Florida prohibit insurers or policyholders from canceling policies within the first few months): the financial responsibility laws. Since many states put hurdles in place to ensure that drivers get insured before getting on the road -- like requiring proof of coverage in order to register an auto -- they also want to make sure that residents don't drop coverage as soon as they've shown that they're in compliance.

To learn more about low down payment insurance, consumers can go to http://www.onlineautoinsurance.com/pay-monthly/car-insurance-no-down-payment/ where visitors will also be able to shop for an affordable policy by using the free quote-comparison generator.

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