Auto Insurance Rates

How Auto Insurance Rates are Determined
Each company adopts its own rating system, although there are general guidelines that all companies follow.

The single greatest influence on the rating process is claim frequency. This does not mean how many times you specifically have made an insurance claim, although that will have an additional effect. Claim frequency measures how often an insured event occurs within a group relative to the number of policies contained in that group. In general, persons sharing characteristics with high claims groups will be charged more for insurance coverage.

Specific Factors that May Affect Your Rate
  • Your driving record - drivers with previous violations and/or accidents are considered to be a higher risk
  • Your geographic territory - urban areas have more claims than rural areas
  • Your gender and age - males have more accidents; certain age groups have more claims
  • Your marital status - married people show lower rates of claims
  • Prior insurance coverage - if you have ever had your insurance cancelled for non-payment of premiums
  • Vehicle use - higher annual mileage results in higher exposure to risk
  • Make and model of your vehicle - luxury and sports cars average a higher number of claims
Tips for Lowering Your Auto Insurance Premiums
Take the highest deductible you can afford.  If you choose to buy comprehensive and collision coverage, be aware that collision pays for physical damage to your car as a result of collision with another object, while comprehensive pays for damage from almost all other causes, including fire, vandalism, flood and severe weather. Also, always remember to drive safely, doing your best to maintain a good driving record.

Additional Tips:
  • Shop around and compare prices. 
  • Before buying a vehicle, determine the cost of insuring it.
  • For cars with a market value less than $1,000, consider carrying only liability coverage.
  • Try to pay your premium well in advance of due date. No grace period applies to automobile insurance.
  • Review your policy periodically and update coverage accordingly.
  • Ask about discounts such as:
    • Multiple cars on a policy
    • Completion of driver education courses
    • Good student drivers under age 25
    • Mature driver (between 50 and 65 years of age)
    • Airbags and other safety equipment
    • Anti-theft devices
    • >Low mileage accident-free record
    • Auto / home insurance with same company