Agent Blog

I got a call a while back from an off-and-on customer, about 58 years old, married, has two cars and one ticket. I quoted him $224 a month for his car insurance. He wanted to know why it was so high when it used to be around $170 per month. It was a straightforward answer, but difficult to explain. It was his insurance score.

Many people find keeping car insurance in-force difficult. With rates so high, it is hard to afford, and if you let your insurance cancel or lapse, it does not get better; it gets worse. First, the insurance company based the rules and pricing on market conditions when you bought the policy. Those factors change at any time for new policies. Second, every time you cancel or lapse, the event reflects on your insurance score, making you less desirable to insurance companies.

The insurer spends advertising dollars, and agent commissions to gain you as a customer. Then, they spend money on underwriting and issuing the policy, whether print or electronic. Last, the company spends money producing and sending you billing, cancelation, and reinstatement notices. The more time and resources to fulfill their communication obligations, the higher the costs they will pass on to you.

The most significant factor influencing the cost of insurance is risk. You need insurance because the risk of accident or injury lurks at every street corner. Insurance companies see how risky a driver you are by how many tickets and accidents you have. Your habit of driving without insurance says you are a risk-taker, making your rates go up.
Keeping your insurance in-force, and increasing your limits just a little as soon as you can catch a break, will both give you cheaper insurance in the long run. You won’t look risky.

Fortunately, he understood when I put it to the customer pretty this way. Now he knows what he must do to achieve cheaper insurance. Call us at Pulse Insurance 503-489-3143, and we will help you get the best insurance now to help make it even more affordable in the future.