WHO IS AFFECTED BY
PRICE OPTIMIZATION?
Price optimization is illegal in 20 states, but
the CFA asserts all states should outlaw the
tactic. “Some companies are still using it, some
have dropped it completely — we don’t know
which are which,” Hunter says. And while every
state requires rates not be excessive or unfairly
discriminatory, he says some state insurance
commissioners just aren’t paying attention
to price optimization. “It’s hidden in rates and
hard to find.”
Because companies use different algorithms
to determine rates, price optimization can
affect anyone who doesn’t compare insurance
rates often. Even those not affected by price
optimization can save hundreds of dollars a year
by comparing rates.
“The reason they can charge you $1,000 and
another person $2,000 is because the person
paying $2,000 doesn’t know about the $1,000
company out there,” Hunter says.
SHOP AROUND AT LEAST ONCE A YEAR
Auto insurance shopping isn’t glamorous, but
just an hour of your time comparing rates might
pay for your next vacation. Whether you shop
online, through an agent or a combination, here
are some quick guidelines on how to compare
car insurance quotes.
Auto insurance premiums change as often as
every six months, so you might benefit from
doing a search each time your policy is up for
renewal, but if that seems like a hassle, aim for
once per year.