Many criteria determine insurance quotes. Many people think that rates are set by law and are unable to be changed. Although the methods used by insurance companies are dictated by the states, the rates themselves are not. Insurance companies give different rates depending upon the type of insurance. This is the reason why comparing rates for different companies can save you a load of money in the long run.
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 does your premium go?
-seventy percent goes to claims.
-four percent makes up their profit.
-26% goes to other expenses.
Why are their different rates for insurance companies?
Each company has different categories with different prices for each, so rates can vary considerably from group to group and company to company. Each insurance company will have their own set of expenses and claim payments. They set their rates based on all this information.
What info affects your premium?
1.Who you are:
-How old are you?
-Are you male or female?
-Marital Status
-Your Area Code
-Where you work
-Credit History
-How long have you been driving?
2.What type of vehicle do you drive?
-Year
-The make
-The model
-Annual mileage
-What are the safety features?
-How much does the car cost?
3.Credentials
-Traffic tickets
-Do you have at least a B average in school?
-Let your policy lapse
-Ever filed any claims before?
-Have you ever filed bankruptcy?
-Have you ever taken a defensive driving course?
-Have you ever had an accident?
4.How much coverage:
-Medical payments
-Do you want rental reimbursement?
-Any roadside assistance?
-Property damage or bodily injury?
-Comprehensive and collision
Matt has been an insurance agent for 15 years and writes for EquotePro.com as a hobby. You may read all his other articles or get free insurance quotes with no obligation.
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