Why do my auto insurance rates keep going up even though my car is getting older? At Kicker Insures Me Agency, many of our clients ask this question so I would like to address it from a couple of angles.
First things first, even though it’s called car/auto insurance, it covers more than just your car. It should technically be called “auto-owners” insurance, similarly to how home insurance is actually called “home owners insurance”.
It’s important to understand that there are a lot of variables that go into insurance premiums, and with auto insurance, it’s no different.
What does car/auto insurance cover?
The insurance company is much more concerned with you crashing into someone and causing them (or yourself) bodily harm, or death, than they are about your car. A car is a material possession which can be replaced.
A human life is not.
When is the last time you looked at your auto insurance policy?
If you look at it you’ll notice there are a lot of different coverages on your auto policy.
- Bodily injury
- Property damage
- Un-insured motorist
- Under-insured motorist
- Medical Payments
- Loss of Income
- Funeral Expense
- Loss of use
- Rental Reimbursement
These are all things that you are covered for on your auto policy. How many of them have to do with your car?
How many of them have a price next to them on your policy?
All of them.
Your car isn’t the only thing you’re being charged for on your policy. That’s because auto insurance covers far more important things than your car as mentioned above.
Let’s put that in other terms: your car insurance rate isn’t just based on your car.
You’re not the only one…
Insurance risk pool
It’s also important to understand that you are not the only person your insurance company insures. You are one fish in an ocean of other fish, sharks, and sea creatures, all who have different characteristics and risk profiles.
Insurance is all about spreading costs over a large number (risk pool) of people, which each person paying their fare share. That risk pool is constantly changing, and is impacted by a ton of different things, including the overall economic climate.
This means that you are sharing in the cost of millions of other people, many of whom may have poor loss history and/or credit.
That’s what insurance is though — sharing in the cost because ideally, if you were just paying for insurance for yourself, it would likely be higher.
The next time your auto insurance rates go up, take a look at the big picture. And make sure you’re looking at ALL of the coverages, and corresponding rates and comparing apples to apples.
Hope this helps!
Contact Kicker Insures Me Agency if you have questions about your car insurance, need a free auto quote, or have other personal coverage needs. We can help you there too as we offer motorcycle insurance, boats, atvs and much more. Just reach out at (281) 487-9686 today.