Thirty-Three Years, No Tickets - Higher Car Insurance Rates?

Mark Stafford has been driving for 33 years with no tickets, no accidents, and no car insurance claims. While his rates have gone up due to inflation, their “real” inflation-adjusted values have gradually gone down over time. That is, at least until he received his most recent car insurance bill - his rates went through the roof. Why would a man with such a solid driving record suddenly get slammed with higher car insurance rates? This article endeavors to find the answer.

It’s As Easy as 1, 2, 3, 4, 5

Car insurance is a game of numbers. Mr. Stafford had been driving for 33 years with 0 accidents and 0 tickets. They say age “ain’t nothing but a number,” but to car insurance actuaries (the number crunchers who determine your rates), that number is very important. Other numbers, like the probability and size of claims based on Mr. Stafford’s demographic groups also come into play, but the five-digit number that caused his rates to go through the roof was his Zip Code.

It should also be noted that Mr. Stafford did not move to a new neighborhood. If he had, then a change in his rates might be understandable. Instead, his neighborhood moved around him - it became a “changed residential territory.” Although Mr. Stafford’s neighborhood is perfectly safe, he shares a Zip Code with other neighborhoods in which the rate of auto theft is high. Furthermore, there had recently been a number of minor traffic offenses and more serious accidents in his Zip Code - though not in his immediate neighborhood.

So should Mr. Stafford be made to pay higher rates? Well, despite his own safe driving, it is possible that other drivers put him in a greater risk of being in an accident. But shouldn’t these drivers be made to pay the cost instead of him? And furthermore, what if Mr. Stafford never even ventures into the neighborhood in which there are more auto thefts and red-light runners? Why should he pay higher rates for simply sharing a Zip Code with a seedy part of town?

Don’t Be a ‘Captive Customer’

All of this seems unfair to Mr. Stafford, and on many levels, it is. Insurance is a pool of shared risk, but it seems as though Mr. Stafford is being asked to assume more than his fair share of the burden. But at the same time, Mr. Stafford has himself to blame. He has, after all, been a customer of the same car insurance company for 33 years. Has he shopped around during this time? If not, then his insurer undoubtedly views him as a “captive customer;” one who will stay with them almost no matter what. In this day and age, consumers need to make car insurance companies compete for their business, and with the internet and sites like carinsurancerates.com, it has never been easier.

It’s very important to note that not all car insurance companies determine your rates the same way. Obviously, Mr. Stafford’s insurer just recently began considering Zip Code in a different way, and now he’s been made to pay for it. But he undoubtedly has dozens of other options - other insurers who do not view his Zip Code the same way - in which he could save money. If you’re in the same boat as Mr. Stafford, then get a free quote from carinsurancerates.com. It’s easy! And who knows, you might just be able to save on your premiums and expand your coverage.