Regulators are now taking a look at how much it costs to cover vehicles across the country.
Over the last few years, the federal government has started to amass a list of consumer complaints and has built a database about credit card companies and banks, which has more recently included auto insurance companies.
The office first made the announcement back in April that it would be increasing the efforts that it was making to investigate the affordability of auto insurance, which is a sector that is typically regulated by the individual states. Almost every state across the country requires that drivers obtain a certain amount of coverage. However, at the same time, it is estimated that approximately 15 percent of motorists do not have a policy.
The Federal Insurance Office was first created through the Dodd-Frank Wall Street Reform & Consumer Protection Act, which went into effect in 2010. It brought about a number of changes across the country for financial service firms. The office is currently making an effort to “monitor the extent to which traditionally underserved communities and consumers have access to affordable” home and vehicle insurance coverage.
According to the director of the Federal Insurance Office, Michael McRaith – who was previously the head of the Insurance Department in Illinois – the office “is evaluating that public input and looking to identify areas of consensus as we move to define affordability … in a reasonable manner.”
The issue of affordability is based on the income of a given household. The amount that a driver earns plays an important role in determining how much he or she will consider to be affordable when it comes to a policy. That said, there are a number of other issues that come into play when deciding whether or not auto insurance can actually be deemed affordable. The office will be working to help to ensure that drivers will be able to purchase their coverage without financial hardship.
