Why doesn’t the cost of insurance decrease with the value of my vehicle?
My car is getting older but my insurance is not getting cheaper. Shouldn’t the price be proportionate to the replacement cost of the car?
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Answered on May 12, 2021
“While the vehicle’s value is a factor in determining your insurance premium, it is one factor among many and is generally weighted less than other factors, such as driving history and experience.
Even though the collision coverage and comprehensive coverage pay for damages to your vehicle up to the actual cash value of the car—which, as you note, decreases over time—they also pay for the cost of labor to fix your car, which has been increasing over time.
You should use an online broker like Jerry that will re-shop your insurance at every renewal to make sure you are always getting the best price.”
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