$116 Increase in Premium for Removing a Vehicle?
Hi everyone, I’m facing a puzzling situation with my Progressive insurance renewal. We currently have a 1998 Buick on our policy with very basic coverage, costing us $281 for six months. When I inquired about the premium if we decided to remove this vehicle, I was informed it would actually increase by $116 instead.
We already benefit from a multi-vehicle discount, as this Buick is our third car on the policy, but it’s hard for me to understand how the total discount amounts to $396 ($281 for the Buick’s coverage plus the $116 increase). This is more than 30% of our total premium for all three vehicles! It seems counterintuitive that it would cost us more to remove a car. Has anyone else experienced something similar? Any insights would be appreciated!
(Note: All figures are for six months of coverage.)
It sounds like you’re experiencing confusion regarding the way insurance premiums and discounts are calculated. Here are a few key points to consider:
Multi-Vehicle Discount: Insurance companies typically offer discounts for having multiple vehicles on a single policy, which can significantly lower costs. However, when you remove a vehicle, the structure of those discounts can change, potentially leading to an increase rather than a decrease in the total cost of your policy.
Risk Assessment: Insurance premiums are based on the overall risk profile of your policy. Removing a car may change that profile, especially if it’s a lower-risk vehicle or has a low claim history compared to the other cars on your policy. This could impact your overall premium.
Cost of Individual Vehicles: The premiums for each vehicle can vary widely based on factors like age, type, value, and safety ratings. Sometimes, the cost to insure a vehicle (like your 1998 Buick) could be low, and removing it might lead to a higher average cost per vehicle for the remaining cars.
Discount Calculations: Your multi-vehicle discount could be applied on a quota basis, meaning that the total discount might be skewed when you remove one vehicle. It’s possible that the overall premium increases due to how the discount is structured among the remaining vehicles.
Insurance Policy Structure: The combination of your vehicles, their coverage levels, and the specific discounts available will influence your total premium. It’s worth reviewing your policy details or asking your insurance agent for a detailed breakdown of how the premiums and discounts are calculated.
If this still doesn’t clear things up, it might be worthwhile to get a detailed explanation from your insurance company, as they can provide specific reasons for the increase and may also assist in finding a more favorable option for your situation.