Car insurance comparisons
October 11, 2012 9:22 PM Subscribe
Why do car insurance prices vary so much?
posted by lewedswiver to Work & Money (9 answers total) 4 users marked this as a favorite
I would think that various companies would have similar mathematical models that, when put in the same data (address, history, etc - my own) give similar prices for insurance.
I'm in California. 24 y/o male with driving history < 3 years.
However, I'm seeing huge variety in quotes. (In fact, it seems a pretty straight correlation between the more established/widespread/highly advertised/prominent company, the higher the quote.)
For example, for (almost) the past year I had been on AAA and was paying ~$150/month (all these quotes the basically the minimum coverage -- no collision or comprehensive).
Geico gave me a quote today of $136. Progressive: $108. Esurance: $89. AIS: $64. Freewayinsurance.com: $31 (!!)
I'm not sure how much I should trust this last company. When they gave me the quote, the website said they would call me on my phone within 10 minutes, and they didn't -- so maybe they never actually would give me that quote. (Then again, it was outside of most people's business hours.) When I see a quote like that, I almost think "too good to be true." Would I get asked by a cop for insurance one day and find out that Freeway is a scam, not real insurance, and then get cited for being uninsured?
And then I also slightly feel antsy even about AIS, because my exposure to them came from them blanketing a radio station with ads.
The bodily injury liability I'm using for these is $15K/30K. The property damage is generally looking at $10K. No comprehensive or collision.
How could there be such a variation in price if they presumably use similar models? Is Freeway literally too good to be true? Any thoughts?