Cactus Village Community

RATING YOUR RATES - Mary Cooper

Jul 17, 2003

QUESTION: My insurance rates seem high. Can you tell me how my auto insurance is rated?
ANSWER: Most companies rate auto insurance on several factors. Ten of the typical rating criteria are listed below:

1. Sex (male or female).
2. Age of drivers.
3. Marital status. Some companies consider a single male a ?“youthful driver?” until an age between 30 and 50.
4. Vehicle year, make and model. Usually the vehicle ID number will give all the information on which the auto is rated.
5. Zip code in which you live. Zip codes are rated according to the claims in that area, which can be due to accidents, theft, or other miscellaneous claims. Glass claims are usually not counted in this total.
6. Driving record?—Department of Motor Vehicle Reports. Companies usually check 3 to 5 years back.
7. Financial stability. This is a new one. Companies have completed research dating back several years and found that, generally, people who take care of their financial status will take care of their personal belongings.
8. Past claims and accident losses. You may be charged for a loss even if the loss wasn?’t your fault. Having prior insurance, with usually no more than a one week to one month lapse. If you were previously insured with a company for high risk clients, or one considered a Non-standard company, you will likely receive higher rates than if you were insured with a Preferred company. And, depending upon your prior insurance company, you may or may not receive credits for being with a preferred company.
10. Use of vehicle. The average number of miles driven per year are considered (low mileage would be under 8,000 annually, average, 10,000, and high, over 12,000). Also, your rates will vary depending upon whether your vehicle is driven to work, school, or just for pleasure, and upon the number of miles driven one-way to your work or school. Credits, as well as risk factors, are also taken into consideration in calculating your rates. Typical credits you will find from most companies are factors such as:
1. Having your home also insured with the same company.
2. Having a three and/or five year interval of good driving, that is, with no tickets, accidents and/or losses.
3. Having prior insurance with a Preferred company.
4. Having more than one vehicle insured.
5. Good student discounts, based on grade point average.
6. Being retired or over age 55.
7. The length of time you had prior insurance with the same company (not jumping from company to company.
8. The limit of liability you currently carry (Arizona?’s lowest limits are $15,000/$30,000 for bodily injury and $10,000 for property damage).
9. Car pool credits are given by some companies. Other credits may be given for features such as antilock brakes, having a new auto, and being the original owner of the vehicle.

If you?’re concerned about your rates, check with your insurance company to see whether you would qualify for any of these credits, or if there is something you can do to lower your rates by evaluating your risk factors. And if you have insurance questions, feel free to call Mary Cooper at 623-776-7560. . . ☺