Why Your Subscriptions Can Directly Affect Your Insurance Premiums
Everyone assumes the same thing when it comes to your car insurance getting hiked up. The traditional things that come to mind like location or number of accidents. As much as this is true, some insurance companies actually use other factors that seem way too farfetched to increase your insurance premium without you knowing.
Think of this, you are subscribed to a certain magazine or you are buying groceries or shopping at certain stores, these can actually indirectly affect your insurance premium. Absurd, but it’s known as price optimization.
What is Price Optimization?
Price optimization is a tactic used to charge higher rates to people based on the likelihood of a person shopping around for car insurance, which essentially is little to none. The algorithms used based on all types of data subjective to their personal data and how loyal they are two other companies that are outside of the norm, such as driving factors or where you’re located.
Some of the main factors in this area consist of your magazine subscriptions how many cars you buy, your website history and much more. So if you’re significantly loyal to one brand, imagine that affecting your car insurance? Do you think that’s fair?
Robert Hunter the director of the consumer federation of America says that it’s not worth it for you to be receiving a 30% loyalty discount if you’re already overcharged for car insurance.
Who is affected by Price Optimization?
Price optimization has been deemed illegal in 20 States. What Robert Hunter explains “Some companies are still using it, some have dropped it completely — we don’t know which are which, it’s hidden in rates and hard to find.”
Those who don’t compare insurance with other companies extensively will be the key candidate for Price optimization. So honestly you just take the time to compare insurance rates and you can save a couple $100 a year.
Hunter also adds “The reason they can charge you $1,000 and another person $2,000 is because the person paying $2,000 doesn’t know about the $1,000 company out there,”
This is probably a daunting task for most, spending the time on the phone comparing rates give you a hassle. But I want to see what the amount of savings you can make throughout the year it’s worth it.
The short thing is, auto insurance changes every 6 months so take a gander at the new pricing you’ll be able to get on your premium.
CEO Sarah Brown Keller Brown Insurance says that she sees the biggest change when somebody as a younger driver to their policy. “You may qualify for a preferred pricing tier before the young driver is added,” for example, but you may not qualify after, Brown says.
No matter what many people say, price isn’t the main factor for car insurance.
Harvey Rosenfeld the founder of Consumer Watchdog says “It’s very easy to be seduced into focusing on the price. But you’re buying this insurance to protect yourself against that fateful day when something happens,” and we absolutely agree with him oh, so take the time to structure a proper car insurance policy that would benefit you in the long run.