October 28, 2009

Why Missouri Experiences Highest Number of Auto Insurance Complaints

Like other states, Missouri requires auto insurance for its residents. However, the state offers several different ways for drivers obtain this kind of coverage. There’s the standard way — purchasing insurance from a company — but there’s also a ‘self insurance’ option. This allows someone to sign a guarantee bond with the appropriate authority, provide proof of his ability to pay, and then count that as insurance. This is called a surety bond. Whether the “policyholder” will be able to pay at the time of an accident, though, isn’t really guaranteed. The driver could lose ability to pay in between the time of the bond and the time of the collision or allow the standard insurance to lapse. In addition, the insurance company itself could be incapable of paying. All of those problems, and others, lead to Missouri auto insurance complaints.

Insurance companies that agree to provide coverage in Missouri know this. The companies also know that there are uninsured drivers in that state. While a person is required to show proof of insurance to register a vehicle or renew the car’s tag, once that’s done the insurance could be canceled. Some people do that to avoid paying money for insurance. Because people resort to canceling auto insurance all together, rates for those who do hold current policies are going to rise. Auto insurance rates have to be high enough to compensate for the people who don’t have insurance — or who don’t have enough insurance to cover the damage that they actually caused. With the surety bond option making insurers and some other drivers nervous, Missouri sees a large number of auto insurance complaints regarding both the lack of auto insurance in the state and the increasing auto insurance rates.

Anyone who lives in Missouri is subject to high rates, and that leads to a lot of complaints. People think that they’re being overcharged because they’re paying high rates even though their driving records are clean. Unfortunately, auto insurance companies have to charge what experience has shown them to be the right price for a particular segment of the population — and part of that is based on the state in which that population lives. Any state that has a lot of uninsured drivers, different ways of showing proof of insurance (i.e. not through a standard insurance company) and/or a lot of accidents and claims is going to have high auto insurance rates. That, in turn, is going to lead to a lot of auto insurance complaints. That is because ultimately policyholders are unaware of all of factors that determine auto insurance rates, along with the auto insurance requirements that are necessary in states like Missouri.