WHAT IS PRICE OPTIMIZATION?
Price optimization is the practice of charging higher rates based on the likelihood that a person will not shop around for a lower price. Insurers create algorithms based on all kinds of personal data, including loyalty to other service providers and shopping behavior, but not your driving habits. This is a separate formula from other common auto insurance rate factors like age, neighborhood, gender and the type of car you drive.
Factors can run the gamut from your magazine subscriptions, the number of phones you buy and your web browsing history. This means a company’s most loyal customers may be most affected by this practice.
And while it’s true insurers often have a loyalty discount, if you’re overcharged by 30%, a 5% or 10% loyalty discount isn’t worth it, explains Robert Hunter, director of insurance at the Consumer Federation of America, a nonprofit group based in Washington, D.C.
With the average cost of car insurance at $1,621 per year in 2019, according to a NerdWallet rate analysis, price optimization could cost you more than you think.
Bu hikaye Techlife News dergisinin February 29, 2020 sayısından alınmıştır.
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Bu hikaye Techlife News dergisinin February 29, 2020 sayısından alınmıştır.
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