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 insurance rates are 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.
-4% goes to profit.
-The other 26 percent is for other expenses.
Why do insurance companies have different rates?
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
-Are you male or female?
-Your Marital Status
-What is your zipcode?
-Where do you work?
-What is your credit score?
-How long you have been a driver.
2.What vehicle you drive:
-Year
-The make
-What model is it?
-Annual mileage
-Safety features
-Sticker price
3.Your character
-Any traffic tickers?
-3.0 average in school
-Let your policy lapse?
-Number of claims filed
-Ever filed bankruptcy
-Have you ever taken a defensive driving course?
-Had any accidents
4.How much coverage:
-Medical payments
-Rental reimbursement
-Do you need roadside assistance?
-Comprehensive and collision
-Comprehensive and collision.
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