When I get insurance on my new car the price is $N/Month. After several years the price stays the same but the amount I would be reimbursed in a scenario where my car is totaled goes down. Seems my monthly premium should go down as well....
Because insurance companies (or any profit making company for that matter) do not like to decrease premiums in some kind of automated fashion. They want you to work hard to get that reduction even if there is one possible.<p>Now, about your car being new vs old, that part is usually covered by "Comprehensive" insurance. It applies only to your car. If you think your car is too old and of not much value, don't buy comprehensive. It is optional unless you have leased/financed the car. If you own the car outright, then you can get rid of comprehensive if you still have it on your policy. Note: I don't know if all states have same laws but generally, this is the case.<p>The part of insurance where you usually don't want to cut corners is the liability insurance. That is, what happens if someone else's car or life/health is damaged by you.
How about a little OP love for a great question. All the responses saying liability is a large part of insurance cost are correct, but comprehensive is a non-zero part and your cap in terms of reimbursement does in fact go down over time.<p>There's possibly also a correlation between new cars and accidents (for the same reason sports cars cost more), though this may be somewhat offset by the probability that injuries probably go down as a function of recency of safety technology.<p>TL;DR - there are a lot of factors in costing insurance, but at least one of them should go down in direct proportion to time.
The catastrophic situation you are insuring against isn't repairing your car, it's your liability for the property and people you hurt in an accident. Unless you're with one of those state minimum insurers, you're probably insured to pay out somewhere between $100,000 and $500,000 to whoever you injured. You wouldn't expect the $N per month for this coverage to change <i>that</i> much whether your maximum payout is $510,000 or $505,000. All the other things that went into deciding your premium (location, accident history, etc) don't automatically change year over year.
In addition to the comments about liability coverage, also remember that in most accidents your car will not be totaled. The cost of repairs only goes up over time.
If you call your insurance company and <i>ask</i> for a premium reduction they just might give it to you. They are not going to simply volunteer to reduce your premium though.
If you carry more than liability past a certain time, you could drop it. Then you don't get coverage if the accident is your fault, but your cost may go down quite a bit.