Will the Affordable Care Act help to lower car insurance quotes?
The Affordable Care Act has already aided numerous Americans in obtaining health insurance coverage that fits their budget. However, it seems that the Act – also often referred to as Obamacare – will have another major effect: helping to bring down car insurance quotes. One recent report found that the proliferation of health insurance policies afforded by the Act will help to lower car insurance quotes significantly.
The Fiscal Times recently reported the results of a Rand Corporation survey which found that the Affordable Care Act will help to bring down car insurance costs. According to the report, health insurance will allow some costs incurred during auto accidents to be covered outside of the confines of car insurance, allowing the cost of car insurance itself to go down.
"The Affordable Care Act is unlikely to dramatically affect liability costs, but it may influence small and moderate changes in costs over the next several years," David Auerbach, a Rand researcher and the study's lead author, told The Fiscal Times. "For example, auto insurers may spend less for treating injuries."
These changes will be small but significant, according to the Fiscal Times summary. Rand projects that across the U.S., premiums will decrease by roughly 1.6 percent as a result of the Affordable Care Act. That decrease may be more dramatic in other states – the report notes that in Alaska, Colorado, and a few other states, such costs could decrease by more than 3 percent.
"As [the Affordable Care Act takes effect,] the cost of providing automobile insurance, workers compensation and homeowners insurance may decline," the report claimed, according to the news outlet.
How the Affordable Care Act is bringing down online insurance rates and premium costs
Many experts have noted the ways the Affordable Care Act will help to bring down overall care insurance costs. While many agree with Rand Corporation's findings, some have noted that cost decreases themselves won't manifest for at least a couple years. Once car insurers see that health costs formerly ascribed to them are now being taken care of by health care plans accommodated by the Affordable Care Act, their premiums will likely drop.
Then there's the explanation of exactly how the Act will bring down these costs. Currently, part of all car insurance premiums is dedicated to liability coverage, which aims to protect those injured in accidents who don't have health insurance. If the Act allows for most individuals in the country to have health insurance, then the need for liability coverage will drop dramatically – allowing for overall premiums to go down, in turn.
In short, if auto insurance companies don't have to spend as much on injuries – since more people will have access to healthcare – premiums could ultimately drop.