Rates, rates, rates....

While scrolling through Facebook the other day, I noticed an ad for a well-known insurance company and since they are my competitor I started scrolling through the comments to see what people had to say about them. There were many comments for and against this company but the majority of the comments were about how this company kept raising their rates. In the world of insurance, rate is probably the biggest deciding factor on choosing a company. As a broker it's the driving force behind how we choose the company that would be best for our clients so I am no stranger to the rate game. However, while the rates vary dramatically from company to company, there are very good reasons why insurance companies have to take rate increases.
Take a walk outside and name the color of the cars that you can see. You will probably see a black car, a blue car and no doubt a red car of some type. Now walk closer to those cars; do they have metallic flecks in them? Is the paint really brilliant? Of course they are! This is because car manufactures are no longer making just plain white, black or red cars. They now have colors like, Ardent Red, French Racing Blue, Tangerine Scream Tri-Coat, Artic White and many more.  These new colors cost more than your standard colors did to manufacture, so to replace them if you are in an accident, it costs more.
Now take a look at your headlights. Back in the day they cost about $20.00 give or take. Today a headlight, for my 2017 Ford Escape is right around $300.00. This is because the cars of today have special LED lights, Halogen, or Xenon lights and those are just the top 3. Headlights are no longer a simple thing to fix and cheap to get. Many times if you are in an accident the repair shop will have to order the headlight which will add to the cost of your repairs.
Next, let’s face it, not everybody out there is insured the way they should be, if at all. When you purchase insurance, you are buying it, by law, to protect the other drivers on the road. You purchase comprehensive and collision coverage to protect your car. The other day when I was driving with my finance’ he asked me why we pay for insurance; the answer was actually a lot simpler than I thought. We pay for insurance because drivers do not want or choose not to obey the laws of driving. In essence we pay for other people’s mistakes.
So now, I know what you are saying, you are still asking why insurance rates are so high. Well the answer is this. While you are driving your 2016 Honda Civic, some person is speeding and doesn’t see you and swerves into your lane and hits you. When they do they wipe out the paint and the front right headlight. You take it to the shop and low and behold it is over $5,000 to fix the dent, repaint your Tangerine Scream Tri-Coat paint and replace your Xenon headlight. Let’s face it folks our want for better, fancier, and more technically advanced cars are what’s driving up the price of insurance. Couple that with increases in accidents from over crowed streets and highways and it is the perfect storm for higher repair prices.  As we all know, it runs downhill and the consumer is at the bottom of that hill. Unfortunately, this is just a couple of the reasons, there are many more, but know that as a broker, it’s our job to do all that we can to make sure that your rates are fair and as low as possible.