Why is progressive so expensive? ForAgentsOnly has your answer as this is pretty common. A concern for most Progressive insurance people is the hefty price that comes along with it.
If you have been grappling with the question of why Progressive is so expensive, this is your opportunity. Allow me to do some rationale explanation to what is exactly behind those high priced premiums.
Why Is Progressive So Expensive? Lets Have A Look
Given the background about why is Progressive so expensive, we have resolved to expound and explore the reasons.
Well, why is it that insurance coverage, you know, isn’t cheap? It’s not like they are selling hot couture bags or Bentley cars, is it? Well, it appears that owning an insurance company is not ‘kiddy’ either.
Here are some factors that contribute to the cost:
- Risk assessment
- Claims expenses
- Admin costs
- Reserve for profit
Therefore, these are the factors which are included in why is Progressive so expensive.
Risk Review
In their essence, insurance firms are just the other side of casinos. What they are betting on is that you will not either suffer any calamity or file a claim. But in order to make that gamble, they have to be knowledgeable of the probabilities. This is why risk assessment is always employed and perhaps the reason why is Progressive so expensive.
Like other risk models in the insurance world, Progressive applies advanced calculations and statistical operations to predict the chances that the user will submit a claim request. If the risk is more, the payment is more, too.
Some of the factors they take into account include:
- Before this policy, how many times were you involved in accidents?
- What’s your age and how many males and females are there in your household?
- The physical address you provided earlier on.
- The model of vehicle being driven.
- Rating score from credit bureaus (in most cases).
Payouts
Once things go wrong and the insured files for compensation, the insurance firm must meet its parts of the bargain. The amounts paid out can be huge in cases of large accidents or high value vehicles.
This means that Progressive has to account for all the operational costs related to these payouts, including when determining the rates charged, and this could be a reason some customers find Progressive so expensive.
Expenses
Managing a huge insurance organization is an expensive affair. Progressive has to make these payments whenever they arise.
- Payment for the workforce
- Public relations and promotional (Flo does not work for nothing)
- Systems and communication networks
- Customer services
All of these expenses ultimately get calculated when charging you for the insurance cover. Hence this answer why is Progressive so expensive?
Profit Margins
Why Is Progressive So Expensive? To put it bluntly, Progressive is a business, and every business must be in profit. However, from the particular periods of terminal decline in profit or in highly regulated Indian insurance.
The insurance companies are still allowed to manage the profit margin at manageable levels in order to cater for stakeholders’ interest. This quest for profits could be the other reason why Progressive is quite expensive.
Important Factors About Progress Expensive
Having grasped the dynamics involved, let us now turn to the matter of Why Is Progressive So Expensive than the other variants offered in the market.
Coverage Options
If you are thinking Why Is Progressive So Expensive? It’s because Progressive provides almost every option for purchase of a policy leading to an increase in the costs. And while this wiggle room is very useful in making sure that you get the policy that you want, it will also result in high costs in the form of premiums, where you will want such very broad coverage.
This broad protection covers Progressive pours mouth watering price in some customers’ bills, to the annoyance of other customers.
Technology
It is well known that Progressive invests in technology which have been mentioned below, so you can check easily.
- Snapshot: A usage-based insurance program
- Name Your Price Tool: Premiums are controlled by policy owners
- Handy mobile app
Although you could take advantage of these tools and save some money, there is a cost in the creation and maintenance of such. Those costs could as well explain the higher premiums why is Progressive so expensive.
Marketing
Ever wondered why you cannot get away with flo in the Progressive commercials? Everyone knows that all that commercialing comes with a cost, and guess what? We are still in your payout.
This aggressive marketing approach is yet another reason as to why is Progressive so expensive.
Target Demographics
Certain Progressive policies may prove more costly for one demographic that they perceive to be somehow risky. Are you a young driver? Or perhaps you have a bad driving history, then you may find Progressive to be rather expensive.
It is this form of market pricing that gives some people Progressive’s high rates, which tends to be a reason why Progressive is expensive for some individuals.
Therefore, Why Is Progressive So Expensive? Various factors like comprehensive coverage, technology, marketing, and target demographics contribute to its higher premiums.
A Look At Progressives Rates
Is Progressive the most expensive overall insurance provider? Not in all cases. Insurance rates can change significantly depending on the case. Let’s consider real data example
| Lifespan | 6 months Premium (Basic Coverage) | 6 months Premium (Premium Coverage) |
|---|---|---|
| Progressive | $750 | $1500 |
| State Farm | $700 | $1600 |
| Nationwide Insurance | $800 | $1450 |
| Liberty Mutual | $725 | $1550 |
Therefore, it is clear that Progressive is not the most expensive option for everyone, every time. It largely depends on the amount of coverage and personal factors. This can be better understood when you analyze the rate and coverage in detail.
Conclusion
To conclude, we have answered Why Is Progressive So Expensive. There are aspects such as the company’s integration of advanced technology, a wide range of policy coverage, and extensive promotional activities which can lead to excessive expenses. However, in these cases, the customer may benefit as well.
In the end, whether Progressive is expensive or not depends on the reasons in your case and what you value most in the insurance industry. Do not hesitate to go from one company to another, ask all the questions you would like, and most importantly, take less than you know you can pay.
Let’s admit it, it’s your cash that’s at stake! So Why Is Progressive So Expensive? Knowing why will help you decide what you really need in circulation with this company.
