What You Should Know About Auto Insurance Ratings

While each insurance carrier has its own rating structure there is a lot of common ground among all insurers. The most prevalent weight they will all find is claim frequency. It’s based across all policy holders within the rating and doesn’t specifically reflect your actual claims (just the potential). Of course if you do have a history of claims that will have an effect on your rating and raise your premiums in addition. They consider it based on how often they receive claims within the group you are rated and underwritten within.

What specifically affects your rate?

Your own driving record will be a major factor, though not the only ones. Of course that will make you a higher risk than those in your area that have never had tickets or claims. Also your age, location, daily driving needs, gender, marital status, credit history (especially in relation to insurance premiums), your vehicle(s) and other factors will be considered. Young males will pay more than many, as will those without recent coverage for autos and those that have been canceled for non-payment.

The difference between No Fault and Tort systems

Every states uses one of these 2 systems. This will definitely impact the underwriting you receive and coverage as well. Under No-Fault (with varying coverage), your insurer pays you directly for loss resulting from injuries (whether or not you were at fault). The tort system has 3 separate types of coverage for liability including bodily injury, property damage and uninsured motorists. The rates are often higher for no-fault and you can determine which system is used in your state from either the DMV or State Insurance Department.

What additional coverage is found?

In addition to the basic required coverage in each state, there will be additional optional coverage as well. The most common one is Collision which actually pays for damage to your own vehicle when in an accident or otherwise damaged when in use. Comprehensive also adds additional glass and windshield coverage to the equation as well as coverage for non-accident causes such as theft, fire, vandalism and more. Comprehensive is definitely cheaper than collision. A deductible (the portion you would spend out-of-pocket in a claim) may be included for both of these and the higher it is, the lower your premium will be.

Other additional coverage that are often available are payment for the rental vehicle, towing, and other things that might arise from use of your collision/comprehensive coverage. When shopping for auto insurance, be sure to find out all of the options they have for you, and be careful to only get the ones that may benefit you under use.

Resource: https://low-insurance.org/top/what-you-should-know-about-auto-insurance-ratings/.
Learn more about 14 factors auto insurance companies use to rate your policy.