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Auto Insurance Claims/Should the premium have change after the market value of the vehicle is down?
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Question
I have noticed the premium of the car insurance usually has no change after year by year unless you had claims before. Since the quote for an old car is usually lower then an identical new car, why should the premium has no change after the market value of the vehicle is down? Should people request to lower the premium because of the change of the market value of the vehicle before the policy is renewed? Can you explain it?
There are a lot of factors that go into determining premium for a policy. Insurance companies change their overall rates for everyone frequently, sometimes 1-2 times per year, depending on the environment. They look at market trends for frequency of claims and how much they pay on average for all claims. Medical costs and parts cost tend to rise every year with inflation.
Then they look at your policy individually. They look at your age, your tickets, time with the company, accidents, and other factors. All can cause a change.
The age of your car does not impact the cost to defend you if you damage someone else's property. It may become more or less expensive to repair your vehicle depending on availablility of parts for that model. It is true that the market value drops and if it were totalled they would pay less, but this is only one of many different factors that go into the premium.
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Answers by Expert:
Claims Guy
Expertise
I am currently an Auto Claims Manager for a large insurance company. I have 18 years experience in the industry, having worked as a Claims Adjuster, Injury Settlement Negotiator, Claims Manager, SIU/Fraud Investigator, and Compliance Officer......I can answer questions related to any aspect of Automobile insurance claims and coverages. I can provide an inside look at how insurers operate. I always treat my customers fairly and want to help make sure you are treated fairly. However, please keep in mind that being treated fairly according to the law does not guarantee that you will get what you want. I can also answer some questions regarding Homeowner's and other types of insurance claims. I have handled all types of auto insurance claims and coverages. I am NOT an automotive repair expert but can give advice re how insurers handle complex repair issues. Please keep in mind that every state has its own set of laws pertaining to rules of the road, liability, and insurance. No one is an expert on every state. I am most familiar with laws in Maryland, DC, West Virginia, and Virginia, but will attempt to answer questions for other states. I am not an attorney an cannot provide legal advice. My advice will be my opinion based on my experience.
Experience
I am currently an Auto Claims Manager for a large insurance company. I have 18 years experience in the industry, having worked as a Claims Adjuster, Injury Settlement Negotiator, Claims Manager, SIU/Fraud Investigator, and Compliance Officer. I am not an attorney an cannot provide legal advice. My advice will be my opinion based on my experience.
Organizations
CPCU Society. Adjusters license in multiple states. International Association of Specal Investigators
Education/Credentials
I have a B.S. in Finance and have completed the AIC and CPCU designations.
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