$116 Premium Increase for Removing a Vehicle?
Hi everyone, I’m dealing with my Progressive insurance renewal and I have a quick question. Currently, I have a 1998 Buick on my policy with minimal coverage, costing $281 for six months. When I inquired about removing the car, I was surprised to find out it would lead to a $116 increase in my premium.
Even with the multi-vehicle discount (this Buick is actually our third car on the policy), it seems strange that the total discount is $396 — that’s $281 for the coverage plus the $116 increase. This discount amounts to more than 30% of the total premium for all three vehicles. Essentially, it’s cheaper to keep the car than to take it off the policy!
Does this situation make sense to anyone?
(Just to clarify, all amounts listed are for six months of coverage).
It does sound confusing at first! Insurance pricing can sometimes seem counterintuitive. Here are a few possible explanations for the situation you’re facing:
Multi-Car Discount: Insurance companies often provide a discount for having multiple vehicles on one policy. In your case, removing a vehicle may have decreased that discount significantly. The $116 increase could reflect the loss of that discount, making the overall policy more expensive despite removing a car.
Risk Assessment: The insurance company assesses risk based on various factors, including the number of vehicles on the policy. A policy with more cars may be considered lower risk overall (because more vehicles tend to spread the risk). By removing a vehicle, the company might see an increased risk, which could lead to higher premiums.
Minimum Coverage: Since the coverage for the 1998 Buick is at the minimum requirement, it’s possible that removing it has altered the dynamics of how the remaining vehicles are priced. Sometimes, having a mix of higher and minimum coverage can lower overall policy costs.
Policies Structure: Insurance policies can have complex structures. The fixed costs associated with maintaining a policy might cause the cost to go up when one vehicle is removed, even if you would expect the premium to decrease.
It might be worth speaking directly to your insurance agent to clarify the situation further and see if there are any other options or discounts available for your specific circumstances. They can provide a more detailed breakdown of how the pricing works in your case.