The Truth About Car Insurance Rates
Car insurance companies spend millions of dollars every year on marketing in the hopes of attracting new customers. They pour millions and millions into television ads, radio and the internet marketing the fact that they can save you hundreds on your car insurance. But how can insurance companies promise to save you more than somewhere else, when most of the time it feels like your car insurance keeps going up and up every renewal? The answer is that some companies will charge the new customer less and pass the costs onto their existing customers. Let’s elaborate.
Having worked in the insurance industry for more than a decade, I have seen firsthand the tactics companies use to attract new customers. One such method is offering a cheaper car insurance quote to attract new customers but paying for it by increasing the rates on their existing customers. Though insurance companies would love for you to be loyal to them, it isn’t always wise to be loyal to your insurance company. Why?
Let me demonstrate with an example. My wife’s car insurance was due last month, so like a prudent wife of an insurance man she decides to shop around for car insurance quotes. Her current insurance company sends her a renewal notice, a month in advance as insurers usually do, hoping that she will “pay it and forget it”. To her surprise the cost of her car insurance for the next renewal has gone up by almost 10%, in comparison to her last year’s premium. She has had no accidents and traffic tickets or anything else that would have changed how she is rated, yet her insurance premium still went up.
Since this site allows you to do car insurance quotes for the company she is currently insured with, I decided to do a car insurance quote to see if the exact same price would come up if she was treated as a new customer. Well what did we find out?
If my wife was treated as a new customer she would have received a discount of 8% with the insurance company in question. My wife wasn’t too happy and evidently ended up going with another insurance company for her insurance this renewal (which she found thanks to this site, your welcome honey!). This example, while being anecdotal, goes to show you exactly how existing customers are having to pay for acquiring new customers by their insurance company.
The best way to avoid this rate increase is to not be loyal to your insurance company. In other words, remember to shop around for your car insurance every renewal. You can do that right here by doing a car insurance quote that allows you to compare insurance companies online.
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It's hard to trust other sites when they are owned by an insurance company, why would they give me a higher price than their competition? You guys provided me with an unbiased quote and I appreciate that. I also received a really good price too. Thank you.
