How Are Auto Insurance Rates Determined?
What Factors Affect Your Auto Insurance Rates?
In addition to comparing car insurance companies, you may also want to research the factors these companies use to determine auto insurance rates. Find out which variables can help you save money and which will ultimately cost you more.
The rising cost of auto repairs and medical care have significantly impacted the cost of auto insurance, in recent years.
If an auto insurance company wants to increase its insurance rates, they must submit their request to the state's Insurance Commissioner. As part of their request, they must include enough financial information to justify the rate increase. If our rate analysts are satisfied with the facts provided, then we are obligated by law to approve the request.
In addition to requesting overall rate adjustments, companies may also change the way their rates vary based on a number of factors like claims history, age, address etc.
Auto insurance rates are based on a variety of factors. The amount you pay is made up of a "base rate," plus or minus certain amounts depending on your age, sex, marital status, driving pattern, claims history, geographical area, credit history, and the make, model, and year of your vehicle.
While the weight given to any factor differs from company to company, the following major factors are generally used by all companies: age, gender, marital status, car make and model, claims history, driving patterns, location, and credit history.
Tips to Save Money on your Auto Insurance...
- Shop around before you buy: Often, auto insurance rates for the exact same coverage will vary from company to company.
- Check on cost before you buy a car: The type of car you own will impact how much you pay for car insurance.
- Select higher deductibles: Your auto insurance rate is affected by the amount of the deductible you select. For example: Raising your collision and comprehensive deductibles from $100 to $500 can produce savings.
- Special discounts: Ask your agent or insurance company if they offer any special discounts. Often, discounts are available to young drivers who are good students or who have finished a driver's education course. Also, some insurance companies will give you multi-line discounts.
- Eliminate duplication: You may have an overlap in coverage, such as medical, collision, or uninsured motorist property damage.