Even if your car insurance agent is the nicest, most compassionate person in the world, there are still some things that he/she isn’t going to tell you. After all, selling car insurance is a business and they want to make sure you are seeing only the good things – even if it means masking the negative parts of your policy. Here are some of the things that your car insurance agent isn’t going to tell you.
“I am getting a big commission on your policy.”
Car insurance agents mostly are paid through commission. This is their incentive to get you to sign up to a policy. These commissions aren’t small either! You can expect about 15-20% of your first-year’s premium to go directly to the insurance agent. After the first year, the agent still gets a commission when you stay a policyholder, though the commission is smaller.
“Your rates are probably not going to drop.”
Some insurance agents like to infer that your rates could drop with them in the future. This is not likely the case. It is much more likely that your car insurance rates are going to go up instead. Forget about all those inferences of “customer loyalty discounts” – they don’t exist! The only way that your car insurance rates are going to go down is if you are a young driver or have an accident on your history. In these cases, a few years of responsible driving can help you get better rates.
“If you have bad credit, your car insurance premium will be more expensive.”
Most people are shocked to learn that their credit history affects their insurance rates, including car insurance and other policies. While your credit may not have any direct link to how you drive, the insurance companies cite some studies which show people with bad credit are more likely to file a claim than those with good credit histories.
“We won’t pay you the full value of your car.”
If your car is completely damaged beyond repair in an accident, your car insurance company will cover the costs – but don’t expect them to give you the full value. They will try to undercut the price whenever they can. Be prepared to do some research to prove your car’s real value, such as by looking up the price of similar vehicles online.
“Even if your car is repairable, we will still probably declare it totaled.”
If you have an accident and your car is repairable, your car insurance company will still likely declare that it is totaled. This way, they can undercut the value of the car and also sell your damaged car for profits.
“If we cannot profit from you, we will drop your policy.”
Just because a car insurance company accepted you, it doesn’t mean that they will keep you. Car insurance companies are looking for long-term profits. If you file a big claim or numerous smaller claims with the company, they may decide you are not worth it and drop your policy.