Contrary to what the "experts" say, auto insurance can be very affordable with the right policy and  provider.

Why the government has it wrong on auto insurance affordability

Texas auto insurance is affordable when you have the right resources available, coupled with convenient discounts. The same standard applies in Virginia, Indiana, Maryland, and really any other state on the map.

But a new government report is out that contradicts this assertion.

An estimated 19 million Americans live in parts of the country where the cost of car insurance is unaffordable. That's according to recent analysis conducted by the Federal Insurance Office, which is part of the U.S. Department of the Treasury.

The 19-page report, which was released in January, examined the cost of coverage in all 50 states, including 9,000 ZIP codes. Of these, in 845 – nearly 10% – premiums were prohibitively high, the FIO concluded. That's the equivalent of 18.7 million policyholders.

Report alleges premiums excessively high in many states

Affordable coverage, the FIO report further declared, is especially hard to find in certain states, particularly those that are heavily populated. As referenced by Reuters, the issue is hitting motorists in New York the hardest, as well as Florida, New Jersey, Michigan and Pennsylvania.

J. Robert Hunter, director of the Consumer Federation of America – an organization that has a history of being critical of the insurance industry – noted that the fact that most Americans are obligated to buy auto insurance by law if they want to drive makes this an important issue to address.

"In every state but New Hampshire, American drivers are required to buy auto insurance," Hunter said in a press release, "but there had never been a comprehensive study as to whether or not insurance prices are even affordable for lower- and moderate-income Americans. The government can't force people to buy products in the private marketplace but pay no attention to whether the prices are sufficiently affordable that people can comply with these laws."

For its part, the insurance industry has taken exception with the FIO report's findings. National Association of Mutual Insurance Companies Vice President Robert Detlefsen described the findings as both "unnecessary" and "ill-conceived," according to The New York Times. Detlefsen also questioned the use of ZIP codes as being an accurate measurement standard.

"Having made use of an inherently unreliable ZIP-code-based approach to determine whether minority and low- and moderate-income consumers can afford to purchase auto insurance based on a subjective 'affordability index' of its own invention, the FIO's findings offer little in the way of useful information," he said in a statement, published by Reuters.

Several recent studies from the insurance industry indicate that auto insurance affordability has gotten better after all. In 2015, the Insurance Research Council released data indicating that the cost of coverage has improved in 45 states since the 1990s and for 46 states since the 2000s.

A separate study – conducted this past June, also by the IRC – determined that the true problem related to auto insurance affordability stems from medical utilization mismanagement – where individuals involved in an accidents went to specialists unnecessarily.

"Without effective action to address medical utilization issues in auto injury claims, high claim costs will continue to fuel affordability concerns," said Beth Sprinkel, IRC senior vice president.

A wide variety of discounts available

Something else that the FIO report fails to mention are the discounts that policyholders are eligible for – often simply by signing up for coverage. For instance at Elephant Auto Insurance, new applicants can take advantage of price reductions by bundling their policies with homeowners insurance. Additionally, completing an online application results in savings as well. And this doesn't take into account how being a responsible driver can reduce premiums, as well as deductibles, via Elephant's Diminishing Deductible program.

Switch to Elephant Auto Insurance today and realize for yourself why the government has it all wrong on auto insurance affordability.