Are you at a loss on how to lower your auto insurance premium? You have tried raising your deductibles, driving fewer miles and restricting which cars your kids can drive only to see your premiums rise each year. Well, here’s a new approach. Ask your agent for a quote with higher Bodily Injury limits. That’s right. Try lowering your premium by buying more coverage!
How can that be you ask? The answer lies in two words, Big Data. According to Google Big Data are ”extremely large data sets that may be analyzed computationally to reveal patterns, trends, and associations”. In other words the insurance industry has been poring through the mountains of data it has collected over the past 80 years seeking to detect patterns and associations that suggest profitability in automobile insurance. One pattern that has emerged is that customers with higher coverage limits have less losses than customers with lower limits. There are a myriad of theories as to why. Some theories focus on demographics while others with behaviors. For this blog the reasons are not important. The fact that customers with higher limits suffer lower losses is what matters.
By raising your Bodily Injury limits you could be positioning yourself among a more profitable segment of insurance buyers. As such you become more desirable to the insurance companies and could qualify for lower rates as a means of attracting and retaining you. We have seen clients raise their OBI limits from $100,000/$300,000 to $250,000/$500,000 and lower their premiums by $100 or more. It does not work every time as there are literally dozens of factors that determine individual rates but we have seen it happen enough that it is now part of our standard practice to quote at higher OBI limits to see the effect for our clients. Try it! You have nothing to lose.