Why Do I Need to Pay Expensive Car Insurance for a Newer Car?
Reader’s Question:
I’ve noticed that my car insurance provider increased my premium for my brand new car here in South Gate, California I don’t understand why I have to pay more for insurance on a newer car!?
Donato
In the car insurance business, one of the most important things you have to remember is that car insurance providers rely heavily on statistics; accidents, theft incidences, injury, collisions, and vandalism are all correlated to the type, built, cost and age of vehicles they insure. Some information comes from outside sources such as The Highway Loss Data Institute and some are from the car insurance provider’s historical records as well. All of these determine how much they compute for your rates and charge for auto insurance coverage.
So basically, the newer, the sportier, or flashier your vehicle is the greater the likelihood someone will steal it, get envious and vandalize it or become more prone to accidents since you may decide to show it around more often there in South gate, California. Your car insurance will justify your high premium on the basis that they consider your brand new vehicle riskier or costlier to insure in their part than a less popular, older vehicle. It may seem unfair to the ordinary consumer but that is how the business of insurance is. There is no reason however, that you should agree to a higher insurance if you can find competitive pricing elsewhere. You can even leverage competitor prices to get a better car insurance deal for your loyalty as a customer.
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