Why Car Insurance Prices Vary Across Companies
Car InsuranceNov 18, 2024 | Patrick Miller, Wilmington, Delaware
Insurance companies give me very different quotes. Why is the average cost of car insurance so different between insurance companies?
I’ve been shopping around for car insurance and have noticed that different insurance companies are giving me vastly different quotes. Can you explain why my average cost of car insurance varies so much between these companies? What factors could be causing such a discrepancy in the rates?
Answer
Head of Insurance, MoneyGeekUpdated December 17, 2024
Many factors are used for the pricing of an insurance policy, and they are mainly based on the pool of policyholders, the severity and frequency of loss events and an insurer’s capital reserve. Generally, a policy underwriter with a strong capital reserve and large market shares could offer competitive rates.
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