Mercury Insurance and
Mercury Auto Insurance
The Cost of Private Passenger Automobile (PPA) Insurance
Auto insurance is something that all drivers are
required to have, and hopefully never have to use. Despite having a
good driving record, sometimes, it seems that your auto insurance
premium keeps increasing every year. Here at Ken Donaldson Insurance
Agency, Inc., we understand your concern, which is one of the reasons
we recommend and sell affordable
Mercury Insurance. There are many things that can
cause your premium to increase, but one of the underlying causes is
the cost of claims.
Private Passenger Automobile (PPA) insurance mainly
consists of:
1) Liability
Coverage, which covers
Bodily Injury and Property Damage claims filed by the other driver or
injured parties.
2)
Physical Damage Coverage,
which covers Collision and Comprehensive damage/loss to your insured
vehicle.
The premiums that an insurance company such as Mercury
Group charges are used to cover the actual cost of a claim (loss), the
expenses that the company incurs to settle the claim such as
litigation and claim adjustment expenses, and the company’s overhead
expenses. Insurers base their rates on the overall loss experience of
all drivers they insure. So while you may have a perfect driving
record and have never been involved in an accident, your premium is
still affected by the claims of other drivers insured by your company.
Insurance is a business, like any other businesses.
When the cost of goods goes up, the business increases its prices in
order to meet projected costs and expenses. Similarly, the price of
Mercury Auto insurance is based on the total claim costs and expenses
of the company. The claim costs are mainly affected by the cost to
repair a vehicle and medical payments. So, when medical expenses and
repair costs increase, insurance premiums also increase.
While the purpose of an insurance company’s pricing is
to be able to cover all losses and expenses, and still make a
reasonable profit on the business, each auto rate change is filed with
the Department of Insurance for review and prior approval. The
companies must be able to fully justify their need for any increase
before approval is given. Attention is given to ensure that companies
are not overcharging to pay for inflated expenses or profit.
Moreover, when the situation warrants it, rates are adjusted downward
to match the trend in losses.
In order to get the lowest Mercury auto insurance
premium available, we recommend that you maintain a good driving
record and make sure that the members of your household's family
also understand the importance of being good drivers. At Ken
Donaldson Insurance Agency we not only want to provide you with the
lowest car insurance rates, we want you and your family to be safe.
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