Why is my car insurance going up?

I bought a new policy with Farmers insurance last year, shopped around a bunch for a good rate, and went with the guy in town. It was a huge drop in price from what I was paying through Progressive, who had apparently raised my rates by a small amount with each statement. I actually got a quote from Progressive too, at the time, just for giggles, and it was remarkably less (like 50% less) than what I was actually paying through them.

So what's the deal here, is this just standard practice now? Quote a low rate and start increasing it as the 6 month statements come in? My rates seem pretty high already, 30 year old married couple with spotless driving record, and it's $850, and now $930 per six months. That's for a Honda Fit and an Element, in suburban Michigan.

A 10% increase within 6 months seems like a lot, considering we made no claims and our record remains unblemished.

What say you?

How does your credit rating look? Your credit score is used in insurance rate evaluation.

I think it's standard practice to bait you in with a low rate and then increase it as often as possible. We change insurance companies every year or so because of it.

Don't complain. I went from $600/6mo for 100/300 liability on my 95 Dakota to $720/6mo. Zero accidents, claims, etc......

Credit for insurance is just a "legal" way to scam more money from people who don't have it.

Because the 75-100 different factors they use to determine your rate, increased/decreased in such a way, that actuaries and the models they put together based on those factors indicates to make a little money, they need to charge you more.

As has been pointed out many times before, most insurance companies don't even make money on premiums. They make money investing the premiums to cover the losses, otherwise, your insurance would be even higher.

Ranger50 wrote: Don't complain. I went from $600/6mo for 100/300 liability on my 95 Dakota to $720/6mo. Zero accidents, claims, etc......

I wonder why insurance in KY is so expensive. OK is generally one of the most expensive places to insure because of all the severe weather we get.

I $600/yr for full coverage on a 2011 crew cab 4wd Frontier.

Ranger50 wrote: Don't complain. I went from $600/6mo for 100/300 liability on my 95 Dakota to $720/6mo. Zero accidents, claims, etc...... Credit for insurance is just a "legal" way to scam more money from people who don't have it.

E36 M3 seriously! I pay $682/ 6 months full coverage on my '93 Civic and that is a 23 year old with one accident. I am with State Farm and I have never had my rate increase except for after my crash and it didn't really increase that much.

they use the lower rates to lure you in, and to use in the commercials where they say they that people that switched to their insurance company saved and average of so-and-so dollars... it's a game, and you are a pawn that's supposed to be one of the brainwashed masses that just accepts it because switching insurance companies is so hard..

Stay on top of it and ask why. If there is any change to your account...question it.

We pay 155.00 per month for 2 vehicles, (3) drivers (one seldom because of college), home owners insurance, and my life insurance policy. SF kept creeping up the numbers, so I went in and got it lowered.

The daughters good student discount helped out a lot.

We have great credit, and I don't think they ran a credit check anyway. I will call tomorrow to see what happened. I didn't mention, we also have our house insured through them. Our daughter is decidedly NOT of driving age.

Also, I had them add the Mazda5 - it was quite a bit more expensive than the Element. Like $200 a year. Oh well!

Mine went up, I called and asked why it went up, and remarkable it went back down.

I guess enough people just pay the up charges and don't call and question.

z31maniac wrote:

Ranger50 wrote: Don't complain. I went from $600/6mo for 100/300 liability on my 95 Dakota to $720/6mo. Zero accidents, claims, etc......

I wonder why insurance in KY is so expensive. OK is generally one of the most expensive places to insure because of all the severe weather we get. I $600/yr for full coverage on a 2011 crew cab 4wd Frontier.

Stupid MF's that get a new vehicle, make a few payments on it, then either can't afford it, don't like it anymore, etc., then they take it up in the mountains around here, burn it, then claim it stolen, and collect the insurance money. Then they just do it again with a different company.

If I moved back to Lexington from here, my rates would be less than half of what they are currently. If I cross the state line and venture into WV, the rates are even HIGHER.

Oh I have called my agent and he says he can't do anything to get my rate any lower.

They're allowed to set your rates based on your credit rating, but they're not supposed to be able to raise it later if your rating changes. You should be able to get it back to normal. Otherwise, it's common for companies to quote you a low rate and then jack it up at your first renewal, claiming they didn't know about this or that when you signed up. Usually you can't go back to your old company without them jacking up your rates since you've dropped them, and now you're stuck.

Ranger50 wrote: Oh I have called my agent and he says he can't do anything to get my rate any lower.

find a new agent..

I'm paying close to what bastomatic is paying for just 1 car ('97 Civic coupe) and less than total coverage.

Rates were pretty much the same, year in and year out with my company while I lived in Memphis...then I moved to Florida. NOW, it seems like they have no problems "pushing" it up every 6 months. But then again, the same thing is happening to my homeowners rates, too.

z31maniac wrote: Because the 75-100 different factors they use to determine your rate, increased/decreased in such a way, that actuaries and the models they put together based on those factors indicates to make a little money, they need to charge you more. As has been pointed out many times before, most insurance companies don't even make money on premiums. They make money investing the premiums to cover the losses, otherwise, your insurance would be even higher.

Ding, ding, ding!!! We have a winner! That's exactly right. People can make accusations of being a scam or whatever, but the true facts are as you said above. It's not some veiled attempt to steal money, it's a lot of metrics.

So why will an insurance company lower rates sometimes if you call to complain? Well, an insurance company is a business, and just like Lowes, Home Depot or Wal-Mart, they want to keep their customers. So if they feel a customer is worth keeping, then they may lower the premium even if it means taking a small loss. Happens all the time, especially in the commercial insurance world. That's big business, cut throat competition.

So when the economy picks up and they presumably can do better with their investments, will premiums go down?

novaderrik wrote:

Ranger50 wrote: Oh I have called my agent and he says he can't do anything to get my rate any lower.

find a new agent..

Every other agent I visit, the price stays the same.

mikeatrpi wrote: So when the economy picks up and they presumably can do better with their investments, will premiums go down?

Yep, at least they have for me with State Farm. They've even issued a "residual" check when their return on investments were higher than expected.

I pay $708/6-months for 2 motorcycles, 2 cars, and 1 pickup. Two drivers, none are fully covered since they're all crappy. Err, the cars are crappy, not the drivers. While we have a clean record I'm not certain we're good drivers.

It was $350 for 6 months on two 11 year old cars with full coverage and a clear record through Progressive. My rates have dropped every six months for the last four years. It was originally about $650.

My Farmers just went down significantly from what i had been paying.

mikeatrpi wrote: So when the economy picks up and they presumably can do better with their investments, will premiums go down?

Can't say for certain, but competition probably would drive the prices down if the economy picks up. Once one carrier drops premiums, the others would feel pressure to do the same to stay competitive. Works the same as it would in most other businesses.

Ranger50 wrote: Oh I have called my agent and he says he can't do anything to get my rate any lower.

My Allstate agent told me the same crap. Now with State Farm. I gave the Allstate rep 5 chances to find some savings..........nada

Possibly important note: Some insurers are mutual-type things (State Farm, USAA, etc.), others are publicly traded. Those publicly traded firms are legally required to maximize shareholder value, and if that means raising your rates then that's what they do. I imagine that the ins. companies spend a lot of time trying to figure out how fast and how much they can raise rates without losing so many customers that they end up losing money.