Car Insurance ~~ Baffling!

Terry’s Auto and Truck Repair

Car Insurance is an enigma! It is so strange how we are required to have car insurance… it is the law.

Having it is a good thing. The thing that puzzles me is that it is a service that we pay for like a warranty on an appliance or computer. We are paying for the ability to repair or replace our vehicle, pay for property damage or medical costs. I feels like we are being held hostage with no release date in sight.

Things that effect the cost of insurance:

  • Age
    Statistically, drivers under the age of 25 are at greater risk of being in an accident than those over age 25. Drivers between the ages of 50 and 65 generally have the safest records.
  • Gender
    Women are statistically safer drivers, but that trend is changing as more female drivers get on the road.
  • Marital Status
    A married person will pay less than a single person with an identical driving record.
  • Geography
    Where you live makes a difference. Folks living in areas with little or no traffic are likely to spend less on insurance than those living in congested cities or suburbs because areas with a lot of traffic tend to see more accidents. Some neighborhoods also have a higher rate of vehicle thefts, which can result in a higher premium.
  • Driving Violations
    Having an accident or moving violations on your record (speeding tickets, DWI, reckless driving, etc.) put you at a higher risk for accidents and will likely mean a higher premium. Some insurance companies will penalize you for your record for as many as five years from when the incident occurred. However, keep in mind, as your record improves, your premium will get lower.
  • Vehicle Type
    A cheap car will cost less to insure than that status symbol SUV sitting on 24″ rims.
  • Accident Claims
    A driving record that is clean and free of accidents will hold far better for you than lots of tickets and/or accidents.
  • Credit Rating
    Many insurance companies view having a poor, or even no credit history as suggestive of higher risk and thus, charge you a higher premium. Monitor yourcredit rating free to see if you can get a better score. A better credit score will save on insurance premiums.
  • Occupation
    Insurers have statistically found a correlation between your occupation and risk. For instance, a newspaper delivery person is most likely a higher risk than the personal banker sitting at their desk all day.
  • Education
    A higher education can save on your premiums.
  • Driving distance to work
  • Miles driven each year
  • Years of driving experience
  • Business use of the vehicle
  • Whether or not you currently have auto insurance and how high are your limits
  • Theft protection devices (often results in discounts)
  • Multiple cars and drivers (another opportunity for discounts)

How can this be? When you purchase a washer, dryer, computer or Television and you add a 2 year warranty, is the cost affected by your credit rating? If you have had to submit a claim does your warranty cost change? Why is it that car insurance is governed by such things. I can fully understand the reasons for some things used to rate the system but some seem to go beyond the fair practice limits.

One of the things I disagree with is this: I live in a small quiet town and yet my insurance rates are figured based on Detroit which is a large, high crime, high accident rate area. I do not live in a suburb of Detroit.

Having your rate determined by your credit rating does not seem appropriate.

Having a non moving traffic involved repair affect your rate. It should definitely not have that affect your rate for five years.Keeping your car in good repair should lower your rates based on other determining factors. For example, they change your rate based on things that have to do with profiling a group of individuals. It is wrong to generalize. There must be determining factors that would help you look at persons individually and determine the amount of risk. A teen-age who is showing a careful, responsible ability should be rewarded at some point and their rate reduced telling them that they are not lumped into a generalized view that says, “teenagers of this age are risky drivers”.

Five years ago, we were parking our car in a parking lot and the underside of the bumper parts hung up on the cement parking abutment and when we backed away it damaged our bumper and it needed repair. We scheduled a repair. The next renewal of our policy the premium increased and remained at that level for the next five years. We purchased a service and yet were punished for using the service for its intended use. I have been mulling this over in my brain and can’t fathom how this could be. So now we have passed the five-year mark and we went back to our provider and ask that the policy be re-accessed and that our premium be recalculated. They were willing to reduce our policy premium by $20. We felt that was not acceptable. We changed providers and reduced the premium by almost $100. That was acceptable.

I am relieved that we have reduced our cost but I am left with the feeling that I have purchased a service that I cannot use. It is a token service. It is there only for appearance only not for use. What good is that! I am amazed that we have come to this place. It’s like putting your money in a hole or being held hostage to the system.

I think this should change! What do you think and is there a way to change this awful monster. Well I got it off my chest but it doesn’t accomplish anything unless there is an action that follows that makes the industry more user-friendly. Don’t you agree?

I am thankful for insurance even though it seems to be a double-edged sword.

Thanks for stopping to visit.  Talk to you again soon.      Jan

Journey Along the Garden Path

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