How Rates Work For Car Insurance
Many factors determine rates for quotes. One myth is that rates are only set by law, unable to be changed. Although methods used by insurance companies to set rates are regulated, the actual quotes or rates you receive are not. You will see different rates for different companies. Comparing rates of different companies can save you a lot of money annually.
How your car insurance rate is set:
When you submit an application for car insurance, they use that information to assign you to a specific,individualized group. Once this group is established, they can look up the price for that specific group. At this time, any discounts will be subtracted from the current total. The entire process can be quite complex, dealing with insurance software to determine their liability to have you as a driver. Obviously, the more risk, the higher the reward in their eyes.
Where do all these premiums go?
-seventy percent goes to claims.
-four percent makes up their profit.
-twenty six percent goes to all other expenses.
Why are their different rates for insurance companies?
Because each company has different small groups and different prices for those groups, rates can vary considerably from one car insurance company to the next. Each company has its own set of claim payments and expenses, and they must set their rates based on that information.
What info can affect your insurance premiums?
1.Who you are:
-Age
-Your Gender
-Your Marital Status
-What is your zipcode?
-Where do you work?
-What is your credit score?
-Number of years licensed
2.What type of vehicle do you drive?
-The year
-The make
-The model
-Annual mileage
-Safety features
-How much does the car cost?
3.What you’ve done:
-Any traffic tickers?
-Do you have at least a B average in school?
-Let your policy lapse?
-How many claims you have filed
-Did you ever file for bankruptcy?
-Taken a defensive driving course
-Have you ever had an accident?
4.Coverage
-Medical payments
-You want rental reimbursement?
-Any roadside assistance?
-Comprehensive and collision
-What about property damage or bodily harm?
Matt has been in the insurance business for 15 years and writes for EquotePro.com as a hobby. You can read his other articles or get free quotes with no obligation.
