We expect that our auto insurance premiums will increase after certain life events such as being involved in a car crash or adding a young driver to our policy. However, it may come as a surprise that some auto insurance companies leverage your personal information in order to determine your policy price.
Insurance companies often use what is known as price optimization when deciding what they should charge each customer. Price optimization is essentially the practice of looking at how likely a company is to obtain a customer’s business.
Your Loyalty Can Hurt You
A factor companies often consider is loyalty among their customer base. To determine this, they may take into account things such as how long you have subscribed to a specific magazine in order to determine whether you are likely to commit to something or not.
In other words, in determining how loyal of a customer you are and how much to charge you, some car insurance companies look at how likely you are to shop around with their competitors. This is similar to the practice of price-matching in which a company will sell you an item for a set amount unless you come to them with evidence that another company is selling it for less money; then they will often lower their price to match their competitor. Price optimization is a very similar concept.
Price Optimization and Personal Information
Insurance companies look to standard factors such as age, gender, and type of car you drive but may also look at everything from your web browsing history to your grocery shopping orders. Sadly, when it comes to many insurance companies, loyalty is a bad thing for you. Those who demonstrate high levels of loyalty will often be charged higher premiums.
Even though 20 states have made the practice of price optimization illegal, it is difficult to determine when companies are even using these practices – let alone hold them accountable.
What Can You Do?
To ensure you are receiving the best rate, it is often in your best interest to do a little bit of shopping around for insurance policies. That’s not to say you need to change your insurance carrier all the time, but since auto insurance premiums generally change on a bi-annual basis, you may want to shop around when it comes time to decide whether or not to renew your policy.
The Attorneys at Carter Mario Law Firm Can Help
If you or a loved one has been injured in an accident caused by another driver, you need an experienced Connecticut Car Accident Lawyer at your side.
Let Carter Mario Law Firm protect your rights and fight to secure the full & fair compensation for your losses. Just call (203) 806-9256 today. You can also submit a FREE Initial Consultation Form online.