You'll save some premium dollars with a multi-vehicle discount. This cannot be disputed. Nevertheless, some people "lose" money while trying to take advantage of this discount. Let's clear this up a bit...
If I sell a product for $1,000 but offer you a discount of 10%, you'll get to pay only $900. But what if another merchant has a display price of $800? In that case, you'd have lost $100 even though they do NOT offer you a discount.
Don't expect an insurer to give you a cheap rate on your "B" simply because they did so for a "B" car. Several things come to play here...
Every insurer use certain factors to ensure that the rates they give you help them give insurance coverage, take care of their overheads while making them handsome profit. Ranking high among the many factors used in the underwriting process is a company's claims history. A simple definition for this is: Details of claims made within a particular period.
It's possible that a company had a good experience with policyholders who have "A" cars. However, for that same company, claims by "B" car owners was way higher than projected. This insurer would be compelled to raise rates for one car while maintaining or even lowering rates for the other.
Another company might have better experience with "B" cars and so be willing to give you a lower rate. Therefore, it's suggested that you first get and compare quotes from other insurers before you can really settle for that multi-vehicle discount.
Remember, a discount only means that they've removed a part of the amount they charge normally. It does NOT necessarily mean they offer the cheapest rate.
Moreover, remember I said that there are many factors that are considered during the underwriting process? Each factor gets a different relevancy score from different insurers. This means a huge disparity in rates for comparable coverage types.
So if you want to insure another car, do extensive comparison shopping. Take this discount if it saves you more or go if your bread is better buttered elsewhere. - 15224
If I sell a product for $1,000 but offer you a discount of 10%, you'll get to pay only $900. But what if another merchant has a display price of $800? In that case, you'd have lost $100 even though they do NOT offer you a discount.
Don't expect an insurer to give you a cheap rate on your "B" simply because they did so for a "B" car. Several things come to play here...
Every insurer use certain factors to ensure that the rates they give you help them give insurance coverage, take care of their overheads while making them handsome profit. Ranking high among the many factors used in the underwriting process is a company's claims history. A simple definition for this is: Details of claims made within a particular period.
It's possible that a company had a good experience with policyholders who have "A" cars. However, for that same company, claims by "B" car owners was way higher than projected. This insurer would be compelled to raise rates for one car while maintaining or even lowering rates for the other.
Another company might have better experience with "B" cars and so be willing to give you a lower rate. Therefore, it's suggested that you first get and compare quotes from other insurers before you can really settle for that multi-vehicle discount.
Remember, a discount only means that they've removed a part of the amount they charge normally. It does NOT necessarily mean they offer the cheapest rate.
Moreover, remember I said that there are many factors that are considered during the underwriting process? Each factor gets a different relevancy score from different insurers. This means a huge disparity in rates for comparable coverage types.
So if you want to insure another car, do extensive comparison shopping. Take this discount if it saves you more or go if your bread is better buttered elsewhere. - 15224
About the Author:
Start saving a lot at Really Cheap Auto Insurance and Cheap California Auto Insurance. Chimezirim Odimba is a financial expert.
