A Down Economy Sends Car Insurance Rates Up
If your car insurance is about to come due for a renewal, you may have noticed that you are being asked to pay more for your monthly premium for the next year.
Initially, you may be thinking back over the past year to see if there is something you have done that warrants an increase in your rates.
Did you get too many tickets? Were you in a wreck? Eventually, you realize, you haven't done anything wrong.
So, why the increase in auto insurance rates? The answer is that is has nothing to do with you.
It has to do with the downturn in the economy.
Doesn't make any sense to you? Read on, it soon will.
When you pay the car insurance company your premium every month, they don't just hold on to that money until you get in a wreck and make a claim.
Instead they try to make as much as they can on your money by investing it in stocks and anywhere else they think they will see a profit.
Unfortunately, when the economy dropped, so did the value of many of their investments.
The profits they had hoped to be making this year quickly disappeared.
In many cases, they not only didn't make a profit, but started losing money on the investments they had made.
If this had been you, you would just have to deal with the loss of funds.
But the auto insurance companies don't do things the same way.
Instead, they are going to pass their loss on to you, in the form of higher car insurance premiums.
What can you do about it? In the respect of changing the increase your car insurance company is going to charge, not much.
But you can start to look beyond your car insurance company to see what else is out there.
Not all auto insurance companies are seeing the same increase in premiums.
The increases all depend on how much of their money was invested and where it was invested.
Many companies are also hoping for the best and not increasing premiums as much as their counterparts.
This means you can save a lot by comparing the amount you would pay from one company to the next.
Make a list of what you need in insurance coverage and look around to see who else can offer you the same coverage but at a better price.
Initially, you may be thinking back over the past year to see if there is something you have done that warrants an increase in your rates.
Did you get too many tickets? Were you in a wreck? Eventually, you realize, you haven't done anything wrong.
So, why the increase in auto insurance rates? The answer is that is has nothing to do with you.
It has to do with the downturn in the economy.
Doesn't make any sense to you? Read on, it soon will.
When you pay the car insurance company your premium every month, they don't just hold on to that money until you get in a wreck and make a claim.
Instead they try to make as much as they can on your money by investing it in stocks and anywhere else they think they will see a profit.
Unfortunately, when the economy dropped, so did the value of many of their investments.
The profits they had hoped to be making this year quickly disappeared.
In many cases, they not only didn't make a profit, but started losing money on the investments they had made.
If this had been you, you would just have to deal with the loss of funds.
But the auto insurance companies don't do things the same way.
Instead, they are going to pass their loss on to you, in the form of higher car insurance premiums.
What can you do about it? In the respect of changing the increase your car insurance company is going to charge, not much.
But you can start to look beyond your car insurance company to see what else is out there.
Not all auto insurance companies are seeing the same increase in premiums.
The increases all depend on how much of their money was invested and where it was invested.
Many companies are also hoping for the best and not increasing premiums as much as their counterparts.
This means you can save a lot by comparing the amount you would pay from one company to the next.
Make a list of what you need in insurance coverage and look around to see who else can offer you the same coverage but at a better price.
