If you have not talked to your agent in a while about your auto insurance chances are you may not be in the loop on some industry upgrades that the auto insurance industry has taken in the last 2-years.
The old-old-old way that we all understood the base for auto insurance was the older my car the less expensive my coverage the newer the car the more expensive. Maybe all I needed was year make and model.
Then we added in the idea that driving records were a good predictor of future driving actions.
Then there was credit scoring, prior coverage scoring, distance to a job, discounts for if you own a home or if you hold a certain job…. and the list went on and on and got more complex.
Now agents are at the mercy of the actuaries – the number crunchers/bean counters. All we need now is your VIN – Vehicle Identification Number, it is essentially a SS # for your car it tells us everything we need to know: year, make, model, safety features, accident history, repair history, engine size, FWD, where it was made, where it has been.
The information assigned to your VIN is not flexible or subject to your insurance carrier. Vehicles are reviewed and scored by the NTSB, this is the agency that scores your car and then provides the data to the insurance companies to generate rates. How are the crash test score, what is the damage rating, how much damage does it inflict on the passengers, how about to others. 98% of don’t care about this information, all we want to know will it stop with my wife in kids in the car and when they are not in the car can I over take that car in front of me.
Which gets me to an interesting conversation I had with a client. He went from owning a 1997 Toyota Corolla to a new to him, 1995 Nissan Altima. He fully expected his rates to go down it was a older 4-door car. The salesman told him it would be cheaper – they never lie to sell a car. It turns out the Altima scored higher than the Corolla, even though Toyotas have a better history of holding their value. The Altima had a bigger engine, less safety features, was bigger by size and weight. All this is built into rates these days.
I wanted to share this with everyone to remind them that talking to someone who works in the field of insurance and is licensed is not such a bad idea. As an educated consumer I think we all like to know a little about the why’s. Buy the insurance from a dealership is like buying a 30-day or 60-day Band-Aid and all they sell is you is what you need to get off the lot and not what you may need to protect your home, business, family, or that nest-egg you have been building.