How are auto insurance rates determined
Mar 11, 2019
By Dany Soni
The most common question all customers have is, “Why is my insurance high and more than my neighbors or friends?” Well there are several variables that determine individual insurance rates according to different auto insurances companies. The following factors contribute on what and how your insurance rates are calculated.
The most common question all customers have is, “Why is my insurance high and more than my neighbors or friends?” Well there are several variables that determine individual insurance rates according to different auto insurances companies. The following factors contribute on what and how your insurance rates are calculated.
- Zip Code
- City
- Age brackets
- Prior insurance status
- Prior insurance liability limits
- Type of car/make/model/year
- Driving record
- Health insurance; i.e. primary or coordinated in auto accident injury
- Numbers of household drivers
- Credit score
- Coverage selection
Therefore, after comparing these factors you will then realize no two people will have the same auto rates. Furthermore, every insurance company has different rating structures among various cities and zip codes. Hence, that is determined based on the losses the company has encountered from particular demographic zones. Lastly, every vehicle’s vin number also has a significant contribution in determining the insurance rates on collision,comprehensive, bodily injury and much more. This is because the Vin no. of a vehicle has accurate information of that vehicle’s manufacturer, year, make, model, safety features, air bags and braking system.
