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Originally Posted by Jazzcat
I must respond to "retired guy" as his opinion that insurance carriers will increase your premium when they realize you don't shop, is not accurate. I speak as a retiree after 40 years as an insurance agent. As another person commented, the insurance industry is heavily regulated by each state, and can't indiscriminately raise one person's rates "just because". With that said, there is merit in suggesting that you shop around. Most insurance company groups have several pricing tiers, so it's possible that you may, due to your record, or type of vehicle you drive, qualify for a lower premium, perhaps even while staying with the same carrier (Travelers, Hartford, Allstate, etc.)
We too experienced a sizeable increase in rate with this year's renewal (up 15%). Our representative at The Villages Insurance requoted us from Travelers to Progressive and was able to save us nearly $300 a year for our 2017 Subaru. I'm not an advocate of shopping each year, but when rates increase dramatically, it is usually worthwhile.
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Actually, I was not expressing an opinion about companies raising rates for loyal customers. I first heard about it on the Clark Howard radio show, and there have been several NPR articles written about it, and other articles about what they call the "insurance loyalty penalty". There have also been a few class action lawsuits. It is called "price optimization". Both Nationwide and Allstate have admitted in writing that they use price optimization to increase profits (Nationwide to the Maryland Insurance Administration and Allstate to the SEC). NPR says that most insurance companies use price optimization. So, that is why it pays to shop around and to not assume that being a loyal customer will get you the best rates.
Price optimization is also used by other businesses to increase profits. For example, some gas stations have computer programs to automatically change the price of gas at certain times of the day because they know when customers are not likely to care about the price (like 2 AM when your tank is empty).