Car Insurance

Many factors will determine what premium rate you see when you ask for quotes. A common misconception is that rates are set by law and cannot be changed. Although the methods each auto insurance company uses when setting rates are regulated by state laws, the rates themselves are not set by the state. This fact means that there will be different rates for each company. Once you understand more, you’ll see why comparing rates from different companies can save you alot of money.

How your car insurance rate is set:

Let’s look at what happens when you submit an application for car insurance. First, you are sorted into an individualized group based on each piece of information in your application, as well as other sources. Once your customized group has been determined, the insurance company calls up the pricing information for that group. Finally, any discounts you qualify for are subtracted from the price, and your quote is returned. The entire process is completed by sophisticated software behind the scenes, based on information you enter online or an agent types into a computer.

Where do all these premiums go?

-70% goes to claims.

-four percent makes up their profit.

-The other 26 percent is for 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 affects your premium?

1.Who you are:

-How old are you?

-Are you male or female?

-Your Marital Status

-What is your zipcode?

-Where do you work?

-Credit History

-Number of years licensed

2.What you drive:

-Year

-What make is it?

-The model

-How many miles you drive per year?

-What are the safety features?

-Price

3.What you’ve done:

-Any traffic tickers?

-3.0 average in school

-Let your policy lapse

-Ever filed any claims before?

-Have you ever filed bankruptcy?

-Any defensive driving courses?

-Have you ever had an accident?

4.Coverage

-How much medical?

-Rental reimbursement

-Any roadside assistance?

-Bodily injury and property damage

-Comprehensive and collision.