Description: This passage is mainly about car insurance quotes. In this passage, the writer goes over many different way insurance companies that raise the rates on you and the writer tells us how it affects and how we can use it.
My insurance doesn’t go up, what do you think about that? We’re going to answer that question today, so a lot of people ask me or talk about how they are frustrated with the insurance companies, because their prices keep going up and they’re sneaking in those dollar amounts and all that stuff.
I’m going to uncover the whole piece of that, if you’re following me, there are a lot of articles, I don’t want it, I don’t want to get you think about that, I’m only on the insurance aside, I’m trying to explain where they’re coming from, so you have a better understanding how it affects you and how you can use it to get the best rates and get the best companies that will fit you.
If you’re in Michigan, I will link a link below, I insure Michigan, so if you’re interested in me, let me know, otherwise this will be generous for the rest of the the U.S. in general, because this is all the same subject, there are several reasons that the rates go up, the most being is that there are claims, they are cut-and-dry.
So the company sets a bar and we’re going to take in this much premium, and then the underwriters are supposed to underwrite the business, they assume the risk, so the underwriters are going to say that we want the risk to be here so that we have this little profit margin which to them is billions.
So they’re looking to make that little billion dollar business out of taking a gamble, they’re playing the game at the casino, we’re going to take in, we’re going to put the risk here, we’re going to stack it in our odds, so we get a bit from each person 5 cents 10 cents a month, sometimes a couple of dollars a month.
If they cut the risk, they’re incredibly happy because now they make five dollars off you, but imagine if they have 7 million people, they make 5 dollars of a person, that’s a lot of money, the point of that is the problem that what they run into is what State Farm has recently run into, last year they put the risk here, they thought that the premium could have been here.
Problem is the risk, here you can’t control it, so to speak at the casino, so what has happened is that they have lost seven billion dollars, that isn’t a light thing and a lot of these companies are having this trouble, because it’s the way that the insurance industry has shifted, because a lot of the younger drivers aren’t driving a lot.
The income from 2008, the crash in 2008 from the housing market, people weren’t buying houses, they weren’t driving new cars, the cost to buy a used car was thousands more than that you can buy used car for today, because no one had the jobs, no one was making the income, people weren’t driving as much.
The cost of gas was three dollars and fifty cents, everything was going crazy naturally, the insurance companies suffered, they held on and they made the risk, but then when it switched around, they could lower because there was less risk, no one was driving, there was not many accidents.
But then they took in all the business planning for it and then the economy flipped around, houses started booming again, the market went up selling, everyone was buying a new car, all of a sudden their driving accident happened.
So the reason why State Farm specifically does that is because they take in a bad loss ratio, they put the value here, the risk that they think is here, it isn’t up being here, so it is a huge gap and a lot of these companies are happening especially with the events that have happened in Florida, so all these hurricanes, all these companies that are insuring Florida houses are now forced to pay out all these claims.
I will imagine if you’re with farmers insurance, they’re probably hurt the worst, because Texas is their first state for homes granted, they’re going to have a lot with those homes, because they focus on combining the two, but that’s one of the problems, so if you’re with one of those companies and you can Google and see how much they insure in that area.
You’re going to see your rate increase because they look at it as a whole, they don’t look at you individually, they don’t say that you’re a good risk or you’re a bad risk, they look it as a whole unit, here’s our state, here’s our area, here’s the risk, we’re hurting in Texas or Florida now, so we’ve got to spread that risk across everybody.
So it’s a little increase, in that way the people in Texas are eight hundred dollars more a year because they have one event and that’s the reason in your area, if you have events like that, you’re not necessarily going to have the rates go way up, that’s positive unless you’re in one of those states where nothing happens.
Michigan is the state that’s where I’m in and where our rates are normally high, because we have a specific medical coverage called personal injury protection, so it usually adds about three hundred dollars a year to us but its own limit in medical, so if we get hurt, we’re coverage, that’s another article if you want to check out my articles.
I’ve got an explanation on that, so the the risks is spread across all the whole of the company, and then they increase it based on that, now the risk of zone that you’re in is typically to put into zip codes, so when you have a state, they break it up into sections and they put the zip codes, because they want to say that when I’m in, when I’m determining the risk for a person, how many accidents are in this zip code, how many claims and how many stolen vehicles.
That’s why they break it down, they want to know how old you are, what’s your date of birth and where you live, so they even pin it down to the average 48-year-old person who lives in this zip code has two accidents in a year, so they calculate the premium based off that risk, but if it changes, you’re in that category for the 48 year old that has the two claims.
All of a sudden, they start having three claims, now the risk has gone up, so then your rates are going to go up, that’s going to be more specific, the other reasons that your rates can have gone up is that you may have gotten a ticket, sometimes you get tickets and you take those classes, that supposedly removes your tickets.
The defensive driving courses will give you a discount on your insurance in most states, but it will not remove the ticket unless you’re in a state, I want to say North Carolina, if I’m not mistaken, there’s one in California where you can get a prayer for judgment and that completely removes the ticket.
To get all altogether, you pay a parking fine and the judge says that this ticket disappears, it never goes on your record, that’s different from taking a defensive driving course where they remove the points off your license, but they don’t remove the actual ticket itself, so it will follow you for anywhere from three to five years depending on the state that you’re in, most states are three years.
The other reason that your price has gone up is that if you have filed a claim, someone might hit you, it’s not your fault, you’re wondering why it is, why my insurance is going up, they’re not necessarily surcharging you most, some companies and some states do that, you’ll probably know who you are if you’re in that state.
But most states don’t count them as fault accidents against you, you’re the ones that get it charged against you, if I’m not mistaken, each company’s different, so you’ll have to ask them by yourself, but if you have got an accident which is not your fault, your price goes up and you think about the reason.
Because there are a lot of companies that give you what’s called a claims free discount or claims free renewal, what they’re going to do is that they’re every five years, three to five years and sometimes it goes all the way to ten years, so the longer you go without filing a claim, no glass claims, no accidents and they’re giving you a specific discount.
Because you’re a lower risk, they’re giving you what you want, you want to say that I’m a good risk because I have never had an accident, I want you to charge me less and some of those are listening and they will say that they will get you as a customer, we’ll do that but once you have that accident at fault or not, some of those companies are going to pull that discount away and your price is going to go up, that’s another reason.
I’m going to go over a few more of them, but don’t forget that if you have one that I don’t mention in the article, put it in the comments below, it’s always fun to see or at least informational for people to see the different ways that your rates can go up, there are typically with homeowners.
So everything’s calculated, they calculate the average homeowner filed one claim every 10 years, so if you have a claim and another claim is within that three-year period such as 10 years, most companies don’t surcharge after three, so in that three-year period you have another claim that can raise your rate, it is extremely high in your home.
You can double the price at your paint because they know that the house has a leak and it leaks again or something else happens, you’re in a higher either high-risk zone or they don’t want to know or find out why or what they want to get out of, the policy will surcharge, it forces you to leave or on the renewal they’ll kick you out the door and let you go to another company.
Typically they’ll search our tie, that will force you to shop and then you’re going to leave 80% of the time, the people are going to leave when you’re getting these increases, you maybe find out why sometimes you have a ticket that has showed up, companies don’t always check your driving record every year, they only know when there’s a change in a specific zone or when that’s time has come.
They say that every three years we’ll check this zone or every five years we’ll check this zone, because it costs them money to check this stuff, so they’ll check it often, they might not know that you have had a ticket for three years, and all of a sudden there’s ticket, let’s charge them, they’re not going to go back and charge you more, because they don’t find it, that’s their responsibility.
You’re probably not going to go out and tell them that you take it, I’m assuming but that’s the way it works, so if they find it, they catch it, they put it on your file, it’s on your file but they’ll check it, so that’s another reason, you might be shopping for insurance and you’re finding that everybody else is giving you higher rates, it might be that.
Your current insurance hasn’t found the accident or ticket even though they should know the accident that’s on your file, don’t quote me but I’m 80% sure that Liberty Mutual is the one that does this, they give you a three-year discount front, so once you’ve been with them for three years, that falls off, and then your rate goes back to the original rate that they will have charged you.
You could have bought a vehicle that was brand new and they couldn’t load the VIN number, it wouldn’t tell them what kind of car it was, so they had to make it up, they said that this was a 2020 flying Toyota Celica and the value of the car was seventy-five thousand dollars, and they’re basing the premium of the value of the car, not the actual vehicle itself.
Then once that vehicle loads into the computer into their database, then they call them of the vehicle and then that will tell you what it should be charged for and what can benefit you or hurt you more often, because they say that we assume that the car is seventy-five thousand, we don’t realize that the parts for these repairs are twice as much.
So now if we have to fix this car, it’s going to cost us a boatload, so that’s another reason, the last reason is that I’m going to go over its credit, so credit now plays a major factor, it doesn’t affect and when I talk to customers, I’m flat-out honest, I know that you may be worried about the credit, you might not have great credit, it doesn’t hurt you as bad as you think it does.
But as it changes, it’s going to cause your rates to change as you renew, so if they’re rerunning the credit, and it’s the same thing with tickets, they might not rerun your credit, you might have had a nine hundred plus score but then it drops down to eight hundred, but they never recheck it, so your price might never change, you might go twenty years, so that’s another major reason.
When you are buying and when the price is changing, your credit can change, I can’t tell you how many times I’ve quoted a person and I have waited for two weeks, and they call me back and say that I finally decide and I’m ready to go, let’s do it, I load it, it reruns their credit and the price changes.
It’s tough because it doesn’t blame the insurance agent for not answering, because there is a lot of work to find out or even notice that their credit changes, what happens when I plug in the VIN and it changes, does the computer randomly change the coverages? I am going to give them, so there are lots of reasons.
It’s a general rate increase that can be, but it’s very unlikely unless there’s been something on the news where a hurricane comes across and wipes out a whole bunch of houses and cars and stuff that are insured with that company.
Now it seems that the rate goes up more than down which is usually true, that’s usually about a three percent increase, if it’s more than that, you probably should be looking into different companies as I have said, if you’re in Michigan I’ll put my link below, otherwise if you are in another state, feel free to shoot some questions and give some answers.
I am now only in Michigan specifically, I still have a few more licenses that are falling off but I am licensed in about 46 or 48 states, so if you have questions, the knowledge is still up there and be happy to answer them, otherwise I will see you in the next one, don’t forget that if you like the article, give me thumbs up and subscribe, if you don’t like it, give me a thumbs down and thanks for reading, good luck.