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Blogs by Brian S. Pratt
Thoughts about car insurance 6/30/2008 11:27:55 AM
Just some thoughts I had after seeing yet another AGI/Geiko commercial. I think car insurance should be renamed 'Driver Insurance' for starters. After all, you can only drive one car at any given time, so why should you have to pay liability insurance on cars sitting in the garage? I believe each person should be charged a single rate based on their demographic, region of country, driving history, etc for a policy good on any car they operate whether it be theirs or another's.
Insurance companies give you discounts for having more than once car on a policy, but isn't that just a way to generate more income for themselves? How many of us operate two cars at one time? In any given instance, there is only one car you are operating, and to my mind, you should only have to pay a single car price. Companies should charge you the rate for the most expensive car you own...and leave it at that. It's a person's skills, experience, and habits which you are insuring against, not the amount of possessions he may have.
Another thought about insurance companies is the plethora of ads telling us how everyone who switches to their policies saves X amount of dollars. What I think would be more informative is for them to quote how many people investigated the possibility of switching versus the number that actually did.
If say 1000 people checked them out and only 4 could save money by changing, that would be good to know. The ads however don't talk about the 996 people who wouldn't save money, they talk about the minority who do. So, if the four people saved an average of $300 when they switched, then they come out and say 'Everyone who switched their policies saved an average of $300' Technically correct but misleading, though I suppose that is what 95% of all ads are designed to do. It's in their nature to spin the numbers in their favor. By the way, these are just hypothetical numbers I made up for illustration purposes and not based on any authoritative survey.
Insurance is a necessary evil in this day and age, I just think it could be better. My mom for instance lives out in the country, hardly drives, but has five different vehicles she uses for various jobs about the farm. They soak her $25/car over the first, most of which don't move for months on end. I wonder if you can call up your company, say 'Drop the coverage on this car and start it on my other one' whenever you decide to drive your second car. An interesting hypothesis. The annoying point would be the repetitive calls to your agent
