Why Do My Car Insurance Rates Never Go Down?

A couple of days ago I received a notice from my auto insurance provider that my policy was about to renew. My coverage would stay the same, I’ve had no accidents, tickets, or claims of any kind, but my rate went up by $12 / month.

Shouldn’t My Rate Go Down?

The vehicles in my household are 6 months older (and lower in value), I’ve been a good driver, I’ve made my payments. My understanding of insurance is my policy should be based on the risk for the provider. Everything about me as an individual would seem like their risk is lowering – yet, here I am with a higher payment.

So, Why Is It Higher?

Here’s the fact, insurance companies know that it’s easier nowadays to shop insurance rates based on price. Insurance is something we are required to have and in general have little interest in unless we absolutely need it.

They need to lower their initial rate to be competitive in the market, but they know once you’ve signed up, they have little incentive to lower your bill. They tack on a “loyalty fee” and hope you don’t pay attention until a major life event has you searching for a new policy.

For most of us, comparing car insurance is boring. We’re used to the automatic payment and we’re ok with it.

But did you know, that you’re rewarding bad business practices and costing you a significant amount of money?

Stop Being Predictably Lazy and Start Saving Money

Insurance companies are counting on us to be predictably lazy. I do it and my job is to focus on budgeting.

Start comparing every time your 6 month policy is up. For most companies you can terminate your current policy with no additional fees.

Other Ways To Save On Car Insurance

Pay your policy in full. Raise your deductible to an amount you’re comfortable affording. A lot of companies offer discounts for paperless billing and automatic payments.