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How Much Money are You Willing to Spend on Insurance?

By: John E. Dowd, Jr

In the world of insurance everyone knows that driving history can impact your insurance rates. What most people do not realize is that your insurance rates can go up because you decided to buy a new pair of shoes or a nice new grill for the summer months.

This emerging tactic is called price optimization – an approach that some insurance companies have implemented. This practice uses an algorithm and statistical models to evaluate how likely you are to shop around for insurance if your current premiums are increased. Terrifyingly enough, these price optimization models are not related to insurance or risk at all – rather, they take into account how often you purchase a new phone or how many drinks you have when eating out.

Price optimization is so controversial that some states have even gone as far as to ban this practice, with some consumer organizations explaining that these statistical models unfairly discriminate. Proponents of these strategies rationalize that these practices are not detrimental to the market at all.

With tactics like price optimization it is imperative that you know why your insurance rates may be going up. Don’t leave your insurance rates in the hands of an algorithm and statistical data based on the highest rate that the insurance company thinks you will pay.

At The Dowd Insurance Agencies, we do not use price optimization; we negotiate for the best price and your  auto insurance rates will not increase based on what the market is willing to bear.

If you have seen that your insurance rates have increased, staying loyal to that company may even hurt you. Contact The Dowd Agencies today for a fair quote that is based on risk not on shopping habits.