That is a common question. The answer is a two part answer and fairly straightforward.
When insured's ask that question they are referring to a total loss in an accident (collision claim) or theft (comprehensive claim).
Reason # 1 - Many claims are "partial" claims, requiring the insurance company to pay to "repair" the vehicle, or even "refurbish" a vehicled recovered in a theft situation.
Just because a vehicle is aging, do automotive parts decrease in cost simply because a vehicle is another year older? Absolutely not. Do body shops and repair facilities charge less for "labor" each year or do labor costs often increase as time goes on? You got it.
Reason # 2 - Most of your auto insurance policy has little or nothing to do with collision or comprehensive.
There are items like Bodily Injury & Property Damage, which pays to fix or replace the OTHER vehicle and injuries in the other vehicle if you hit someone else. What about Uninsured and Underinsured Motorist? Medical? Towing? Car Rental? Glass?
As you can see, there are a whole list of items on an auto policy that have little or nothing to do with Collison or Comprehensive.
That is why premiums do not always decrease, even for an older vehicle.
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