Several states have joined in the fight against price optimization to determine pricing for auto insurance policies.
Online PR News – 09-September-2015 – Salt Lake City, Utah – Several states have joined in the fight against price optimization to determine pricing for auto insurance policies. While Utah is not among those states, individual companies may begin reviewing their own procedures to ensure fair pricing for all customers.
Price optimization occurs when companies use customer data not directly related to their driving records to determine pricing. One of Utah’s neighboring states, California, currently doesn’t allow the use of credit scores to determine pricing. Credit reports is just one piece of data used. Companies may also use education and occupation among other factors to determine rates.
Some critics believe that people with lower education and income are less likely to shop around for the cheapest insurance prices and are therefore charged higher rates. These consumer advocates suggest that insurance rates are too high for those in lower income brackets. However, other studies show that the cost for auto insurance is actually declining, becoming more affordable for everyone.
More companies are offering insurance to most drivers regardless of past driving history, and those policies are more affordable than in the past. The results of these studies are good news to drivers looking to save money on car insurance in Salt Lake City.
"The key is to shop around for the best rates, regardless of your driving history or other factors," says Creed Anderson of ASA Insurance, a car insurance company in Salt Lake City. "We encourage people to look for the best deals and always try to find them the best rates."
A study completed by the Insurance Research Council shows that the average policy cost has decreased from 2 percent to below 1.5 percent from what it was in the 1990s. This is good news for those who are looking to save money on auto insurance in Salt Lake City.
While critics are concerned over the data used to determine insurance rates, the reduction of rates is proving that insurance can be more affordable, especially for drivers with good records. Many of these data points are used to anticipate policyholders who are higher risks for claims. Long-term studies have shown that people in specific categories are more likely to be involved in collisions and file more claims.
Anderson says that people with good driving records are still rewarded with lower insurance premiums. They receive more discounts based on past performance and can enjoy lower rates. "The focus should be on driving defensively, staying alert and avoiding distractions and being an overall safe driver."
Anderson also recommends that drivers become informed about car insurance before making a decision about which policy is best. Sometimes the cheapest policy isn’t the best choice, especially if you are worried about having adequate coverage. Educated drivers who understand their policies and the pricing will feel more confident about the premiums they are paying. The key to keeping insurance affordable is being a good driver and comparing rates regardless of past driving history, occupation or credit score. Look for the company that offers you the best deal and periodically compare it with others to ensure that you continue to enjoy the best rates.