Have you ever thought that if each of our neighbors would drive just a
fraction less that what they are driving now that our auto insurance
rate would drop? This could be what more and more people are seeing as
more and more people are carpooling. When there is a decline in the
amount of accidents that occur each and every year, the auto insurance
rate will drop because the auto insurance companies are not spending as
much on the repairs of the vehicles that are involved in accidents. When
the auto insurance claims drop the cost of your auto insurance rate
will drop as well.
The same theory applies when there is a mark up in the gas prices. The
gas prices being higher will result in consumers spending less money on
gas and therefore less time on the road. It is a domino effect that in
the end will result in the cost of your auto insurance policy dropping
down in price. The amount of miles driven from one year to another has
dropped incredibly since more and more Americans are unable to afford
the cost of their auto insurance rates as well as the high prices of
gas. For this reason, many auto insurance companies have decided to cut
back on the cost of the auto insurance and ultimately your auto
insurance rate will have dropped as well.
What happens when the auto insurance claims drop is that the auto
insurance companies will respond pretty quickly to the drop? When this
happens, the auto insurance company will adjust their premiums and then
the new auto insurance rates will go into effect. The auto insurance
companies can change the prices of their policies at any time to respond
to the market and what the market is doing. The insurance company will
file with the state insurance department and will begin to use the new
rates before they need the approval of the state insurance department.
This is done when ever the insurance company feels that the market is
calling for a drop in the auto insurance rate.
Many of the leading insurance companies will begin to see a drop in
their claims faster than what the local insurance companies do since
they handle a larger quantity of claims each and every day of the year.
When they begin to see a decline, they will lower their prices which
will lead to the local companies lowering their prices in order to stay
in competition with one another. The whole theory is that of a domino
effect which results in you shelling out less money on your auto