How Much Does Auto Insurance Cost?
Posted by: info | May 18, 2007
Every driver wants to know how much they should pay for auto insurance. There are no set in stone pricing or guides insurance companies use or follow. And to make things worse, premiums can vary hundreds of dollars or more per company. How does any consumer know they’re getting a good deal?
Auto insurance quotes are calculated differently for each person and individual company. Can a 20 year old driver pay $400 more than another 20 year old in the same state, with the same company for the same coverage?
I don’t know if anyone can figure the exact formula for calculating auto insurance cost. Here are some possible reasons for not having a standard rates for auto insurance.
Could it be the Agents? Agents may act as a middle man (a third party) of sorts when providing quotes. They may have several companies they work for or make money from. This enables them to get multiple quotes for each driver and provide them with the lowest possible rates.
On the other hand, agents are probably using the exact quote forms the company uses. Most agents are paid based on a policy, not price. Plus it is in their best interest to give you the best possible rate to earn your business. They know that most consumers shop around for the best deals.
Could it be the companies? Most companies rely on computers to calculate rates for quotes. Computers and calculators are much more accurate than humans. They can’t pick and choose or play favorites for certain consumers. Companies may have a magic or secret formula to calculate rates. However, is would seem as is all companies work off a similar formula.
Based on studies policies varied up to $600 per company. Auto insurance companies who offer direct coverage, don’t have to pay an agent. This would make you think that this way of shopping would be best. However, the agent has many tools, resources and offers that a company doesn’t have. This would seem to benefit the agent.
It is very possible for a consumer to get a different quote online vs. over the phone from the same company. This puts a stranger twist on how to calculate auto insurance. This is further proof of the need to comparison shop many different companies and getting multiple quotes from all available sources. Such sources may include an agent, directly from a company, online, over the phone and in person.
In the future we may have a standard way of calculating insurance cost. Personally I like the system set in place now, it makes learning auto insurance very interesting and exciting to get the best deal.
Posted in: Insurance, General |
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