There is Something Strange in the Car Insurance Quotes

There is something very fishy going on in the car insurance industry of late. A recent study by a insurance watchdog organization found that of all the different types of insurance products available, car insurance products have the greatest price variance given the same set of variables. To the lay man, if you use the same set of information about your lifestyle, where you park your car, your workplace etc and use that information to get quotes for the same coverage from different companies you will get huge differences in their quotations for car insurance. Sometimes the difference between the lowest to the highest can be as much as 100%. The coverage and risk figures are exactly the same; the only thing that can account for the difference in price is how much money the insurance company wants to make off their clients.

Some smaller companies that specialize in providing coverage for car insurance can even specialize in this type of practice. In effect what they do is prey on people who only ever get one quote for their car insurance needs. A small number of clients are too busy and will simply settle for a more expensive car insurance quote because they don't know that there are much cheaper options out there. This may also be the case because their insurance agent has recommended their service. Little do they know that the insurance agent gets a bigger commission by referring the overpriced insurance to their clients.

Just to put this into perspective, this practice of focusing on customers that will pay more for their car insurance needs isn't exactly wrong. It isn't illegal and is endorsed by the insurance associations. It is a part of marketing customer profiling and is looked upon favorably by almost everyone in the insurance industry. To them, there is nothing wrong with offering an insurance product with a high quotation. The choice is still up to the consumer if they want to proceed with the offer or not. It certainly isn't the prerogative of the insurance firm to offer quotes that are market competitive. There is nothing wrong with marketing to consumers who are willing to pay the extra premium for whatever reason.

This is where the time honored saying of being a prudent customer comes in. It simply calls for you be wise before you settle on a certain car insurance policy. You have to make sure that you aren't taken advantage off and get as many car insurance quotes available. We can understand that many people are too busy to fill in the many car insurance quote forms and liaise with the many different companies but the benefit of it far outweighs the costs. You will have a much better understanding of what you should be paying for you car insurance policy and you also get a higher level of market understanding.

Some people will simply stick to their insurance provider year-in year-out just because they are comfortable with their arrangement. Some insurance companies have a policy which increases your premium by a few percent every year. Over a number of years your car insurance policy could have gone up in cost by as much as 50% but you don't really feel it due to the small incremental percentage increases. It is only when you actually take the step to take the same date that you have and apply for the same insurance coverage with other companies that the differences are highlighted. Even when you already have an on-going insurance policy, there is not reason why you should not be looking around for a better deal with other insurance companies.

The morale of the story here is to be prudent not only when looking for a car insurance quote the first time, but also be prudent even if you have and existing policy. Always be on the look-out for better deals on the market. Insurance companies really have very little loyalty to their customers and you should treat them the same way that they treat you. Always be cautious of the price and keep a look-out of changes in policy that should be reflected in the pricing.

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