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Dear Disgruntled:
It's tough to take a hit in your wallet when you've managed to avoid taking one in your car! However, there is a logical – though perhaps not popular – explanation for your pumped-up premium.
The amount you pay for your car insurance is influenced by many factors – everything from the incidence of fraud experienced by your insurance company to the number of collisions and the resulting repair costs that your insurer must pay. The cost of medical and rehabilitation claims by injured persons also affects your auto rates. Even if you haven't had a claim, your rates will likely go up if your insurers' overall costs have gone up.
Although faced with spiraling costs, your insurance company has had little choice but to raise your rates in order to stay profitable. While you may not care whether or not your insurance company makes money, its financial health will affect you in the long run. If an insurance company does not make a profit, it cannot stay in business. If your insurer and others go out of business, that would leave you with fewer companies to choose from to insure your car. Less competition would mean that the remaining insurance companies would have less incentive to provide a competitively priced insurance product. And we know where that could lead.
While you can't control the factors that led your insurance company to raise your rates, you CAN control your driving record by continuing to drive safely. And that's the best cost-saving – not to mention life-saving! – measure you can take.
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