The Car Insurance Revolution Won’t Be Televised - It Will Be Online!

Recent studies have predicted that car insurance rates will be heading lower in 2007. The reasons given for the sudden change of course have been demographic (Baby Boomers are reaching their safest driving years), technological (cars are getting safer), and financial (more affluent Boomers are taking out higher deductibles and paying for minor damages themselves). But maybe  the truth is that the people have the power, and we've finally stood up to the car insurance companies and said, "We're not going to take it anymore!"

Power to the People

Undoubtedly, there is truth to the demographic, technological, and financial stories told by car insurance industry spokesmen. But not all industry leaders are singing the same tune. Recently, the CEO for one of the largest car insurance companies in the United States told his shareholders that car insurance rates are coming down because the people have harnessed the power. His exact words were, "There has been a power shift to the consumer."

In the past, agents could set your car insurance rates with almost dictatorial power. After all, if you didn't like the rates or service you got from your local agent, who else could you go to? Maybe there were a handful of agencies in your town, a few more in your county, but they all colluded with one another to keep rates high. But with the advent of the internet, the old game changed. Now people can buy car insurance from all over the country, and the car insurance industry is increasingly competitive. Companies have no choice but to lower rates, as the CEO of that major firm said, "We want to make sure we don't lose them (customers) to someone else at a price we would be comfortable with."

A Shift in the Way Car Insurance Companies Do Business

Let's really analyze the CEO's words: "We want to make sure we don't lose them to someone else at a price we would be comfortable with." Think about it. He's saying that, in the past, it was standard practice to charge people higher rates than necessary. The company would have been "comfortable" with lower rates, but they charged the higher rates because they knew they could. Baby Boomers getting older, cars getting safer, and deductibles getting higher did not bring about this shift in philosophy - people taking action did!

But let's look at the statement a little closer yet. The CEO wants to make sure he doesn't lose a customer to someone else at a price he would be comfortable with. What strikes fear into the hear of this CEO? Comparison shopping! If you don't shop around for the best car insurance rates, this CEO and others like him will consider you a captive customer - a virtual hostage to rates even higher than they're "comfortable" with. Use the internet to shop around, and when you find a better deal, call your current agent to let him know you're switching. You just might be surprised to find out that he is "comfortable" offering you an even better deal. If you don't shop around, you are literally throwing away money, so what are you waiting for?