Several Important Reasons That Determine Changes in The Costs of Car Insurance

LOS ANGELES, July 1, 2019 /PRNewswire-PRWeb/ -- Carinsuranceshoppingsource.com has launched a new blog post that presents several reasons why car insurance rates are changing over time.

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Drivers that renewed their insurance policies for more than once are well aware that the costs of insurance can vary a lot. Some drivers might be boggled about the sudden insurance costs changes, especially those who are not familiar with the methods used by insurance companies in order to determine the insurance premiums.
The main reasons why insurance premiums change over time are the following:

    --  Claim ratio. Any insurance company wants to make as much profit as
        possible. The ideal situation for an insurance provider is to sell
        insurance policies to customers that will stay for a long time with them
        and will never be involved in an accident and will never file a claim.
        This means that the insurance company will have 100% profit from their
        premiums. However, insurance companies have to pay the claims of their
        customers. In order to not lose money, insurance will try to spread the
        loss to all of their paying clients, even to those who never made a
        claim.
    --  Driver's profile. In order to maximize their profits, the insurance
        providers are targeting certain types of drivers. For example, providers
        can target middle-aged persons that have enough driving experience, or
        seniors that are rarely driving. Besides that, insurance companies can
        target persons that have certain professions that are being deemed more
        responsible because their jobs involve higher analytical skills and
        responsibility. For these reasons' insurers want to attract these
        persons to be their customers. In order to do that, they are willing to
        offer all sort of discounts and special offers.
    --  Statistics. Insurers use many statistics that are provided by the
        authorities and various organizations. All of these data is added to an
        insurer's algorithm in order to determine the insurability risk. The
        data is continuously updated, so the results change over time.

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SOURCE Carinsuranceshoppingsource.com