The Strange Fact about Car Insurance Quotes

January 4, 2017 · Posted in General Articles on Car Insurance 

Many people might not know this, but those who work in the insurance line are all but too familiar with this strange trend. Car insurance products have the record for being the most variable price amongst all insurance products even given the same insurance variables. Meaning, even if you supply the different insurance companies with the exact same data and request for a car insurance quote with the exact same coverage, you will get wildly different quotations, some probably doubly expensive compared to the cheapest. All the variation in prices cannot account for anything, purely the profit margin that the insurance companies want to make off you.

This is even to the point that some of the smaller car insurance providers specialize in making their living on preying on people who aren’t too careful with their car insurance products and will simply settle for the higher priced policy because they are either too lazy to obtain quotes from other providers or are too trusting of their insurance agents who might get a higher “cut” by referring them to car insurance quotes that are simply too expensive for their coverage. The insurance industry especially for companies that specialize in car insurance products is very competitive now. The bigger institutionalized insurers are generally able to provide cheaper quotes to end users through the sheer volume that they pass through their system. This leaves very little room for the small neighborhood insurance agencies in terms of pricing and coverage. They have to either rely on their better customer service or extra frills that large insurance providers can’t offer. Some have taken this too far and decided to prey on the unsuspecting customers who obtain the first quote and sign up for the car insurance policy without looking around or even looking through the details of the insurance coverage.

Just to compound matters even more, what these insurance companies are doing isn’t exactly wrong. Although some people would rightly consider it preying on the unsuspecting car insurance rookies, the industry actually considers it smart customer profiling. There are no laws against these practices and even industry watchdogs have turned a blind eye to this practice saying that any fault would lay squarely on the arms of the person requesting the car insurance quotation. Looking at it subjectively, as with any purchase, it is up to the customer to find out if they are getting a good quote. It isn’t the prerogative of the insurance provider to give you a quote at the market price. Almost all insurance companies are profit making entities and thus must strive to satisfy this need. Customer profiling is looking at the pool of customers that you can potentially target and find ones that are easily satisfied with whatever quote your provide to them.

Being a prudent customer also calls for you to at least get a few quotes from different car insurance companies. We can certainly understand that many people are indeed busy to liaise with the different car insurance companies to obtain quotes however the benefit of doing it (lower quotations and market analysis) far outweigh any inconveniences with filling up forms and calling the insurance company to chase for quotes or verifications.

Some people will simply stick to their insurance provider year-in year-out just because they are comfortable with their arrangement. Some insurance companies have a policy which increases your premium by a few percent every year. Over a number of years your car insurance policy could have gone up in cost by as much as 50% but you don’t really feel it due to the small incremental percentage increases. It is only when you actually take the step to take the same date that you have and apply for the same insurance coverage with other companies that the differences are highlighted. Even when you already have an on-going insurance policy, there is not reason why you should not be looking around for a better deal with other insurance companies.

The morale of the story here is to be prudent not only when looking for a car insurance quote the first time, but also be prudent even if you have and existing policy. Always be on the look-out for better deals on the market. Insurance companies really have very little loyalty to their customers and you should treat them the same way that they treat you. Always be cautious of the price and keep a look-out of changes in policy that should be reflected in the pricing.

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