Insurance companies are actively exploiting your customer loyalty to charge you more money on your car insurance rates. Yep. It is happening. “Price-optimization” is what the term that the pro-insurance-industry-think-tank generated to fool you into thinking it is a good, optimal thing. What it really means is that insurance companies are buying your personal data, combing through your Facebook and Instagram feeds, calculating how they can shake you down for some more cash because of your loyalty. Have you lived in the same house for several years? Sucker. Do you like to buy your coffee from the same local coffee shop every morning, loyally handing over your hard-earned money for a locally brewed fresh cup? Gullible. So you like to purchase the same-brand paper towels, produce, chips, or frequent the corner Albertsons because you like its location? You are a prime mark.
Allstate, GEICO, Farmers, and almost all of the other big insurance companies (State Farm and Progressive are the only companies who confirm they do NOT use “price optimization”) are paying big money to purchase your social and purchase history (pictures holding up your Starbucks cup on Instagram! Those check-ins at your favorite gym! Your grocery shopping list!) to determine whether you are an easy mark. Are you loyal to one brand? Do you resist change? Then, through “price optimization,” they raise your rates. What are you going to do? Shop around? Leave them? They are banking that the answer is no. They are using your loyalty to gouge you and manipulate your auto insurance rates. They think your brand loyalty extends to them, and that you will think that your loyalty is being returned when they raise your rates 15%, then offer you a 10% “loyalty discount.” Yes. They think that us loyal customers are that dumb.
So, what can you do about it? Well, you can shop around, look for better rates, and try to get the best deal on the insurance coverage you need. This goes against your consumer and social data, and the insurance companies don’t think you will do it. They know it takes time, and they know it goes against your loyal nature. You can call your car insurance company and ask if your pricing is based on “price optimization.” They better tell you the truth, or you could have claims for fraud, misrepresentation, bad faith, and a complaint with the State Department of Insurance.
Show them that loyalty does have its bounds. You can only kick a dog so many times, and it will finally turn around and bite you.