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It is no more in an insurance company's interest to raise rates arbitrarily than it is for any other company. If one company's premiums are significantly more e
by spicyj 11y ago
It is no more in an insurance company's interest to raise rates arbitrarily than it is for any other company. If one company's premiums are significantly more expensive than other insurers, they'll lose customers – and if what you say was true, any insurance company that realized this could cease the practice and gain many new customers.
- snowwrestler 11y agoThe whole point is that in the post-accident customer's mind it is NOT an arbitrary price increase--the customer feels that they "earned it" by getting into an accident. But all the insurance company cares about is revenue vs. expenses across the entire pool. If they can charge one customer more, it allows them to charge another customer less--like, by advertising a low fee for new signups.