Thursday, December 11, 2008

Why Auto Insurance Continues to Rise?

When gas prices soared earlier this year, people started to drive less. And with less driving, that should mean fewer accidents which should translate into lower auto insurance for consumers.

There are a couple of other supporting factor which in theory should drive down auto insurance rates. The battered economy and looming recession has brought car prices down, especially used cars in the luxury or gas guzzlers variety. As a result of lower car values, auto insurance rates should decrease because insurance payouts for totaled, stolen, or salvage cars should be lower. Also, modern cars are superior with advance technology in safety to reduce injuries in the event of an accident. For the 2009 models, it's not uncommon for a car to have 6, 8 or more airbags.

Despite all this, why is it that auto insurance continues to rise?

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3 comments:

K said...

It is very interesting to see people opinions on why auto insurance continues to rise. It's helpful and interesting.

Anonymous said...

maybe they are doing it b/c they can. no one is stopping them yet. people are focused on gas prices and the economy.

Ju said...

I don’t know what state or country the supposed "agent" was from but let me clear things up a little.

1) yes, raising deductables can lower your premium, but you can’t drop comp and carry collision. Most if not all ins. companys will allow you to carry comp, but no collision, but require comp if you want collision.

2) There are no taxes, except in Kentucky, which taxes based on municipality and is usually incorporated into your rate.

3) Premium finance companies exist, but most larger carriers no longer work with them. Your better of using a credit card and paying that back

4) Are you living with mom and dad still? If so, your best bet is to insure the vehicle on their policy- if you live elsewhere, you need to get your own policy.

5) Don't liability only on a car you just paid $11,000 for. Thats called self-insuring, and unless you can afford to just replace the car your own, its a poor financial decision.

6) There is no "cheapest provider". Rates vary, all over the board. go online, call around, you’ll find it. One thing to make sure of though is that

a) your quoting the same coverage everywhere you go
b) that all companies have the same idea of driving record (if I think you have a clean record, but you don’t, don’t think I wont find out and raise your rate a month into the policy if needed)
c) know your prior insurance history. many companys will give you a break if you’ve had insurance for 3 years or more. Even if on mom and dads.

7) They lowered rates in 19 states, so now would be a good time re-quote your rate. See here:

http://tinyurl.com/d6xg2k