More Consumers Expressing Concern Over Growing Auto Insurance Costs

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  • Over the past several years, millions of Americans have likely noticed their auto insurance rates on the rise, and have grown worried about how this added cost will end up impacting their overall bottom lines. However, this may come to a head even more considerably in the coming months as consumer advocates spread the word about a new type of pricing model some insurers are rolling out these days. If policyholders call agents and express concern about what this might mean for them, it could be wise for those professionals to walk them through the issues they may face, and what such policies could mean for them.

    There is a new and emergent trend in the auto insurance industry that has many experts concerned and many consumers on the lookout for better deals, according to a report from the Pittsburgh Post-Gazette. These days, competition in the industry is so cutthroat that companies will do just about anything – in terms of pricing – to lure other firms’ clients to their side. But that has also led to potential problems for those who have stuck with their current insurers for years or more.

    What’s the issue?
    It seems that about half of the nation’s major auto insurance companies are now using a method known as “price optimization” for consumers they think are unlikely to shop around, the report said. This means that they will raise prices to levels pinpointed by analytics as the maximum that would prevent a consumer from seeking coverage elsewhere. The practice is relatively new to the auto coverage industry, but about has been used by others for years.

    “Your insurer may be increasing your premium by far more than your loyalty discount, precisely because you have been so loyal,” Bob Hunter, director of insurance for the Consumer Federation of America and former insurance commissioner in Texas, told the newspaper.

    Insurance agents may field concerned calls from consumers, and anything they can do to allay misgivings about coverage their companies offer – and assuage their potential desire to start shopping around – could go a long way toward not only maintaining their business, but also improving customer satisfaction rates. Many consumers may have misconceptions about their policies, including what they do and do not cover, and as such, may not fully understand the value that it provides. Those agents who can combine that kind of assurance with the ability to provide an occasional discount might see even more positive relationships between themselves and their clients.