Wed 19 Sep 2012
Posted by admin under Uncategorized
Comments Off on Why Car Insurance Premiums Vary So Much?
Would it be a shock if two similar looking companies were charging completely different rates? Why would that surprise you since you see price differences in almost every industry? You probably come across or have no clue about varying auto insurance quotations. Think about all those TV advertisements. Did you think they were lying when they told you could save fifteen? How about if we tell you could save fifty percent?
What is the point of having hundreds of different companies if they all sold the same product at the same price. Every company comes into market believing that they have a strong point that others don’t have. This could be that their products are well thought off and cover a lot better. Or they may find a way to keep their costs down and charge you less. Some companies don’t have telesales representatives and they only sell policies only. They don’t have to have thousands of staff and large offices to house them. Besides, why would people would want to buy from a company who doesn’t even bother to pick the phone up? The answer is they are cheaper than others.
It is surprising how many motorists think that their premium would be about the same regardless of which company they go. That is why they go straight to one of the biggest ones and buy a policy. Unless they come across somebody with a lot lower premiums they wouldn’t be the wiser and keep paying their premium for years.
The premiums can be hundreds and sometime thousands of dollars different between two companies. This has been tested many a times by brokers and comparison websites. Their findings are eye opening and warning to motorists who doesn’t shop around. In some cases certain companies can quote thousands of dollars for a basic liabilities auto insurance especially if you have a bad driving record or living in the cities. While one company loves cities the other hates them.
When you don’t check your alternatives and keep buying from the same company year after year you may end up paying twenty percent more easily. You may think that you are loyal and therefore the company looks after you better. You may think it wrong as a totally new policyholder with similar details as you can get cheaper quotes than you. You are in the bag and not require much servicing. But new customers need to be attracted with cheaper prices if they were to switch.
There are so many components of an auto insurance price. A few of them is related to the company offering them. It is like processing plants. When you start changing a few things around the quality of the product that comes at the end will change. Companies are different from each other to start with. And each company is fiddling with their system everyday in search of perfection and higher premiums. So, it would be naive to think that prices will be similar and furthermore they will stay the same.
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