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Who Sets Auto Insurance Rates
Auto Insurance rates are a complicated business. Have you everwondered who sets your auto insurance rates and how the ratesare actually derived? Many factors determine how much you willpay. Most of these are common sense and you probably alreadyknow but let’s go over them just in case. The very first thingthat occurs is that the insurance company determines all itscosts for the previous year. This includes all claims, the costof operations, and what ever costs they incur. They then takethose costs and divide them among all the drivers insured withthem. This sets a base line for them but it doesn’t mean that’swhat you will pay. Your driving record plays a major role in howmuch your premiums will be and whether you earn a discount. Thebetter your driving record the lower your total cost to insureyour auto is going to be. Your driving record includes autoaccidents and speeding tickets. If you haven’t insured a vehiclefor a few years they will also penalize you. This sounds crazybut it’s because they have no way of following up on yourdriving habits so they consider you a bad risk. What coverageyou purchase will be reflected on your premiums. Deductibles area good way to save money. Check with your insurance company andfind out what effect raising and lowering your deductibles doesto your policy. Remember to never take a deductible that is morethan you are willing or able to pay in the event of a claim.Your insurance company will not divvy up their share until youdo. Age is also a determining factor. Studies have shown thatyounger drivers are involved in more accidents then olderdrivers. Some of this is due to their lack of experience. Mostinsurance companies charge you more until you reach the age of25. Although some will offer some discounting for every year youdrive accident free and without driving infractions. The type ofvehicle you drive and how far you drive affect your rates. Thatfabulous sports car you’ve been eyeing could cost you a bundle.You should check rates on any vehicle before you purchase tomake sure you are willing to pay the rates. Some cars get betterdiscounts than others because they more safety devices such asanti theft immobilizers. Some cars also rate list becausethieves don’t like them and so they don’t steel them. Yourinsurance company also charges you more if you drive lots. Theless you drive the cheaper your premiums will be. Most insurancecompanies use an average of 10,000 miles in a year. If youexceed this you can expect your premiums to go up. Where youlive also affects your rates. Big city drivers will pay a lotmore than some one lives in a rural area or small village.That’s because cities have more thefts, more accidents, and moretrouble over all. Follow this information to help save onpremiums. Don’t forget to shop on line. Rates can varydramatically from one company to another. With a few clicks ofthe mouse you can have several quotes and get low cost insurance
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