I recently received a call from a customer who has been with us on and off, about 58 years old, married, and with two cars and one ticket. I quoted him $224 a month for his car insurance. He wanted to know why it had increased so much, from around $170 per month. It was a straightforward answer, but difficult to explain. A reduction in his insurance score caused the increase.

Many people find keeping an active car insurance policy difficult. With high rates, it is hard to afford, and if you let your insurance cancel or lapse, the situation worsens, not improves. First, the insurance company based the rules and pricing on market conditions when you bought the policy. Those factors can change at any time due to the latest statistical analysis. 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. Lastly, the company incurs expenses to produce and send you billing, cancellation, and reinstatement notices. The more time and resources they need 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 the number of tickets and accidents you have. Your habit of driving without insurance indicates that you are a risk-taker, which can increase your rates.

Keeping your insurance in force and increasing your limits as soon as you can afford to will give you cheaper insurance in the long run. You won’t look risky.

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