Why Do My Auto Insurance Rates Keep Going Up Even Though My Car Keeps Getting Older?

Many people wonder why their auto insurance rates keep going up even though their car is getting older.  At BTJ Insurance, we care for our clients and their doubts. That’s why I would like to address this concern.

First things first, even though it’s called car/auto insurance, it doesn’t cover only your car. A technically correct name for it would be “auto-owners” insurance, similarly to how home insurance is actually called “homeowners insurance”.

It’s key to understand that there are a lot of factors that go into consideration when calculating insurance premiums, and with auto insurance, it’s no different.

Insurance companies are much more concerned with you crashing into someone and causing them (or yourself) bodily harm or death than they are about your car.

Do you usually check your auto insurance policy?
If you do, you’ll notice there are a lot of different coverages on your auto policy.

Bodily injury
Property damage
Un-insured motorist
Under-insured motorist
Medical Payments
Loss of Income
Funeral Expense
Loss of use
Rental Reimbursement

These are all examples of what is covered with your auto policy. How many of them have to do with your car? None.

How many of them have a price next to them on your policy? All of them.

That’s because your car insurance rate isn’t just based on your car.

You’re not the only one…
It’s also important to keep in mind that you are not the only person your insurance company insures. You are one fish in an ocean of other fish, sharks, and sea creatures, all of who have different characteristics and risk profiles.

Insurance is all about spreading costs over a big amount(risk pool) of people, with each person paying their fare share. That risk pool is constantly variating and is affected by a ton of different things, including the economy.

This means that you are sharing in the cost of millions of other people, many of whom may have poor loss history and/or credit.

That’s what insurance is though — sharing in the cost.

The next time your auto insurance rates go up, think about the big picture.

Hope this clears up some of your doubts!  If you would like to learn more about car insurance be sure to visit our page dedicated to it.