Who Sets Auto Insurance Rates?

Auto Insurance rates are a complicated business. Have you ever wondered who sets your auto insurance rates and how the rates are actually derived?
Many factors determine how much you will pay. Most of these are common sense and you probably already know but let’s go over them just in case.
The very first thing that occurs is that the insurance company determines all its costs for the previous year. This includes all claims, the cost of operations, and what ever costs they incur. They then take those costs and divide them among all the drivers insured with them. This sets a base line for them but it doesn’t mean that’s what you will pay.
Your driving record plays a major role in how much your premiums will be and whether you earn a discount. The better your driving record the lower your total cost to insure your auto is going to be. Your driving record includes auto accidents and speeding tickets. If you haven’t insured a vehicle for a few years they will also penalize you. This sounds crazy but it’s because they have no way of following up on your driving habits so they consider you a bad risk.
What coverage you purchase will be reflected on your premiums. Deductibles are a good way to save money. Check with your insurance company and find out what effect raising and lowering your deductibles does to your policy. Remember to never take a deductible that is more than you are willing or able to pay in the event of a claim. Your insurance company will not divvy up their share until you do.
Age is also a determining factor. Studies have shown that younger drivers are involved in more accidents then older drivers. Some of this is due to their lack of experience. Most insurance companies charge you more until you reach the age of 25. Although some will offer some discounting for every year you drive accident free and without driving infractions.
The type of vehicle you drive and how far you drive affect your rates. That fabulous sports car you’ve been eyeing could cost you a bundle. You should check rates on any vehicle before you purchase to make sure you are willing to pay the rates.
Some cars get better discounts than others because they more safety devices such as anti theft immobilizers. Some cars also rate list because thieves don’t like them and so they don’t steel them.
Your insurance company also charges you more if you drive lots. The less you drive the cheaper your premiums will be. Most insurance companies use an average of 10,000 miles in a year. If you exceed this you can expect your premiums to go up.
Where you live also affects your rates. Big city drivers will pay a lot more than some one lives in a rural area or small village. That’s because cities have more thefts, more accidents, and more trouble over all.
Follow this information to help save on premiums. Don’t forget to shop on line. Rates can vary dramatically from one company to another. With a few clicks of the mouse you can have several quotes and get low cost insurance.

Hidden Ways to Cut Car Insurance

Consumers are countering rising gasoline prices and other vehicle operating costs by capitalizing on lower auto insurance rates, according to leading insurers.
Auto policy costs and regulations vary significantly from state to state, but there are a number of areas that consumers are able to control and adjust to optimize prices and quality. Answer Financial (www.answerfinancial.com) has 10 tips for keeping your rates down:
Check Credit Rating. In all states except California and Georgia, an individual’s credit rating is a key factor that affects auto insurances rates. Good credit will be interpreted by insurers as less risky. Thus, it’s important for consumers to order copies of their credit report from all major credit agencies to ensure accuracy and to correct any inaccurate derogatory points, such as late or missed payments, maxed-out credit lines, bankruptcy, foreclosure, etc.
Check Motor Vehicle Report. Like credit reports, state driving records may include inaccurate data on personal driving records, which are strongly considered when issuing respective individual and family auto rates. In addition, tickets, traffic school credit, and accident fault are sometimes not accurately reflected in state data, costing consumers hundreds or even thousands of dollars. Drivers should report errors to both their state motor vehicle department as well as their insurance carrier.
Double-Check Accident Reports. Local law enforcement and insurance accident reports occasionally include mistakes that will result in a higher rate. Accident reports are separate from motor vehicle records. Accident reports affect insurers’ decisions and rates on a cumulative basis particularly if the driver has tickets or accidents down the road.
Never Let Coverage Lapse and Review Deductibles. Maintaining coverage without lapse makes a significant difference in rates. Separately, while deductible amounts initially save drivers in the event of a quick claim, they cost consumers more in the long run due to higher premiums. Drivers almost always save on premiums with higher deductibles of $500 or $1,000.
Look for Package Rates. In addition to multiple-vehicle discounts, consumers often save substantially by packaging all their insurance policies including auto, home, and personal liability together with one company.
Don’t Miss Good-Student and Mature-Driver Discounts. Most consumers know that safe drivers are rewarded by insurers, but it’s important to make sure your policy gives you a good driver discount. Most insurers lower rates for mature drivers (55 years and over) and for students who carry a 3.0 grade point average or better. Some carriers give more credit for these points than others, so shop around.
Take a Driving Safety Course. Many insurers will cut rates for drivers who take an approved driving safety course. Make sure that you’ve registered for a course recognized by your carrier, which will not only cut your rates but likely save in ticket fines and reduce your risk of bodily injury on the road.
Don’t Forget Car Pool Credit. Many auto carriers drop premiums if you car pool to the office, especially if you drive more than 10 miles roundtrip. In addition, you’ll save considerably on the rising prices at the pump and lend a hand to Mother Nature.
Check Rates Before Buying a New Car. Insurance rates vary considerably from car to car. Often expensive vehicles can add $50 - $100 per month in premiums. The type of vehicle, engine size (you’ll pay for that turbo), parts costs and safety tests are all factored into insurance premiums. Sport cars and SUVs generally are more expensive to insure. Buyers often do not realize the big rate differences until after they drive off the lot.
Take Credit for Safety/Security Features. Drivers should make sure they are receiving lower rates for safety features such as air bags and anti-lock brakes. Devices that deter theft, such as alarm systems or devices that disable or track vehicles (such as LoJack), may also qualify for discounts. Some companies even waive deductibles if the car has been damaged when it was stolen but is recovered using a tracking device.

The Car Insurance Calculation Explained

Different companies will apply different factors to the way they finally arrive at a price for your Car Insurance. Generally speaking though the concept is the same. This involves collecting various bits of information from you and feeding it through a computer system which adds or takes away money depending on the answers you give.

The value put on these answers is decided by the individual Car Insurance company.

For example, some Car Insurance companies may believe that having a speeding conviction increases your chance of having a personal injury accident in the future - therefore they may add money to your price if you have such a conviction.

Similarly, some Car Insurance companies may decide that because you have a lot of No Claims Bonus Years then you are less likely to claim - therefore they may discount your price. All in all there are around 30 different factors that may affect your final premium. Now you can see why you get such a difference in the price of your Car Insurance by going to various companies. Each company will have it's own view of what they believe should be assigned to each answer you give. The Car Insurance quote you get through the Accept Direct website will look at lots of different Car Insurance prices from lots of companies.

That way you can get the best possible price for your profile.

New Car Registrations and Car Insurance

In September 2001 the Driver and Vehicle Licensing Agency (DVLA) introduced a new number plate registration system that was designed to last for 49 years. The new change was welcomed not only by the car dealers but also by the car insurance industry as the DVLA also decided to issue new car registrations twice a year instead of once a year.

In the past, new registrations were issued on 1st August every year. Inevitably this caused a major headache for insurance companies as so many people required insurance at this time. This once a year rush for insurance was compounded by the summer timing when most people, including insurance company employees, go on holiday. Today, the new registrations are issued in March and September. This eases the workload for insurance companies and allows them to more easily staff up for the increase in calls.

Of course, the old system ran for about 38 years and so there is still a large population of people who require insurance renewal on 1st August. So around July, August and September, Insurance companies are still especially busy and you can generally expect long call centre waits with a lot of direct companies.

Using the internet instead is a much easier and quicker way of getting your new car insurance quote. Accept Direct have a very fast online quote system which cuts out the need of waiting for a call centre person to answer. The Accept Direct website is available 24 hours a day, 365 days a year and along with its sister online claims website will deliver you a competitive quote in minutes.

How Is Your Auto Insurance Policy Price Determined?

The average auto insurance policy price is derived from a variety of factors. Many of these variables are common knowledge and make sense for the most part but it’s always a good idea to refresh yourself with what insurance companies are looking for when determining how much your coverage will cost.

Driving Record – Your auto insurance policy price is determined from 6 major areas. The first is your driving record. The key thing to remember is the better your driving record the lower your total cost to insure your automobile. This would include auto accidents, speeding tickets and believe it or not if you’ve gone without insurance for several years. The good thing is that you can directly control many of these factors. Concentrate on keeping a clean driving record and this area shouldn’t cause your rates to be outrageous.

Coverage Amount – Do a self check sometime and call your insurance company up to see what impact raising and lowering your deductibles and coverage amount has on the price of your insurance. Raising a deductible lowers your monthly payment. Increasing the deductible has the opposite effect. The same goes for the actual coverage amounts.

Age – Case studious have proven that younger drivers are involved in more accidents then older drivers. This potential to be involved in a collision is a result of inexperience behind the wheel of an automobile. Generally speaking most insurance companies charge more for individuals under the age of 25.

Vehicle Model and Driving Mileage – If your interested in that fancy new sports car you may want to check how much it will effect your auto insurance policy price. Thanks in large part to theft, vehicular costs and safety records some cars rate a higher premium over other vehicles. As if it wasn’t bad enough the amount of annual miles you place on your vehicle through driving can increase your auto policy. The average used is 10,000 miles in a year. If you exceed that total then you can expect a rate increase based on your increased potential to be involved in an auto accident.

Your Residence – It’s a pretty safe bet that you’ll pay more for your auto insurance policy if you live in a big city when compared to a nice farm out in the country. The city probably has more thefts and accidents, which lead to higher costs absorbed by the insurance company and then passed along to the consumer when the insurance companies determine your auto insurance policy price.

Hopefully this information can help you focus in on some areas within your auto policy that you can review with your insurance agent in the hopes of actually lowering your auto insurance rates instead of raising them.

Why Should You Purchase Your Auto Insurance Online?

If you’re interested in slashing your auto insurance bill in half then there’s no reason why you shouldn’t consider purchasing auto insurance online. Buying your auto insurance online is extremely easy and very convenient. The process is fast and only requires filling out a simple form. The best part is you can receive multiple quotes from several different auto insurance providers from the privacy of your own home. You can even search for a new money saving car insurance policy in your pajamas if desire to do so.

Many experts agree that most consumers overpay on their insurance policies due to a lack of shopping around. This includes vehicular insurance. Additionally they overwhelmingly endorse purchasing auto insurance online due to the ability to start your insurance application, save it, and finish later if you get pressed for time. If you’re concerned about the cost associated with receiving multiple insurance quotes don’t be. By applying online you can get multiple free car insurance quotes from one application. You’re also never under any obligation to accept any insurance quote provided – even if it saves you money.

As far as the drawbacks to purchasing auto insurance online there aren’t many. Obviously you’ll have to have access to a computer with an Internet connection and around 30 minutes of free time depending on the number of free insurance quotes you wish to receive. Keep in mind before accepting any quote that you could qualify for a bigger discount from your current auto insurance provider if you carry multiple insurance policies with them. For instance a combination of car, home and life insurance may cost less as a group when compared to purchasing individually.

It’s only natural to have concerns with the privacy of the information the insurance company requires you to fill out on their quick quote provider form. However rest assured that any information you provide is kept secure with encryption technology and will not be released to anyone else to include other insurance providers unless you agree to allow it. You can also feel comfortable in knowing that your credit score won’t be affected by applying for free auto insurance quotes online.

After you’ve found a quote that you like purchasing auto insurance online allows you to either accept the quote right then and there or you can opt to receive the rate provided in the mail. Either way you’re guaranteed to save money. A word of caution, make sure the information you provide on the insurance application is correct. Even the smallest errors can adversely affect the money saving rate that is provided.

Probably the most difficult choice will be which online auto insurance provider to choose from in order to receive your free quotes. Look for a company that has excellent customer service reviews and offers a simple application process that provides multiple money saving quotes. Finally don’t forget to check and make sure that they can actually provide an insurance quote for the state you currently reside in

How Do I Lower My Auto Insurance Premiums?

It seems as though the price of everything is on the rise. The amount a house may have cost in the early 70s is how much you will pay for a new car in the 21st century. Oil companies have used the problems in Southwest Asia as an excuse to send gas prices through the roof. And the cost of peace of mind when driving your vehicle knowing if you or your vehicle is injured in an accident you will be covered has become astronomical. So what can you do to lower your insurance premiums so you don’t feel as though you are paying a mortgage note in exchange for a vehicle and a car note in exchange for insurance?

Consider how much coverage you really need to buy and the price each of these coverages will pay. Think about collision and comprehensive coverage, which is how much you will be reimbursed for the loss or destruction of your vehicle. Are you carrying $30,000 worth of collision coverage for a $12,000 vehicle? Is the insurance company really going to give you $30,000 when your vehicle is only worth $12,000, unfortunately not?

If you are leasing or financing your vehicle these coverages may be required however if you are driving an older car that has depreciated significantly you may want to consider saving on your premium by dropping this coverage. Before you drop it make sure you can afford to foot the bill on the entire cost of replacing that vehicle if it is lost.

Think about the cost of insuring that sports car or luxury vehicle before you purchase it. If higher premiums is a small price to pay for going from 0 to 60 in .5 seconds go ahead and purchase that Ferrari, if not consider the sedan.

Generally you can’t help where you live but expect that you will pay higher premiums in cities or towns that have high rates of accidents and vandalism as opposed to more rural low crime areas. The X and Y-chromosomes are luck of the draw and everyone ages in the same slow, drawn out amount of time. Oh and of course everyone can’t find that special someone and settle down right away but if you had control over any of these things it would help control your premium rates.

Single, young males under the age of 25 get the short end of the stick in this deal so if you fall into this category make up for this price increase by purchasing a more sensible vehicle. Consider delaying the purchase of that cherry red Mustang until after you’re 26 and married. Another aspect of higher premiums is your driving record. Drivers who cause accidents will pay for it in their insurance premiums. If you’re a high-risk driver the insurance company is going to supplement the money lost on safe drivers by increasing the amount you will have to pay. So slow down, leave earlier, be patient and think about how much money you can save every year by obeying the traffic laws.

What Do You Mean My Auto Insurance Policy Doesn't Cover This!!

Auto insurance is an agreement between you and your insurance company where you arrange to pay a premium in an exchange for the peace of mind that your insurance agency will pay for vehicle related financial losses during the duration of the policy. You need auto insurance because you are liable by law to pay for losses you cause to others in the event of an automobile accident. Purchasing auto insurance is the surest way to guarantee you will be able to fulfill your end of the bargain. In some states it is required that you have minimum forms of insurance in order to drive. You also must have insurance in order to finance a car.

One of the first questions you will be asked when obtaining automobile insurance is how much of the covered loss or deductible do you want to be your responsibility? You may choose between $100, $250, $500, or $1,000. The higher your deductible the lower your premium however you must keep in mind that the deductible is the amount you must pay before your insurance will assist you. If you cannot afford to pay the first $1,000 of the covered loss you may want to consider how much you can afford and choose a lower deductible.

Your insurance coverage is broken down into each purpose you would need to be covered for. One of the most common coverages include liability which pays out when the insured driver is legally responsible for bodily injuries and property damage they cause to others. Bodily injury damages cover medical expenses, pain and suffering, lost wages and other special damages. Property damage includes damaged property and loss of use. Liability also pays legal defense expenses. Each state has a set minimum amount of coverage you must carry but you may opt for higher amounts.

Personal injury protection pays medical expenses for covered individuals despite who is at fault for the accident. It also covers rehab, lost wages, replacement of services and funeral expenses. Medical payment coverage pays medical and funeral expenses regardless of fault when the causes of these requirements are due to an automobile accident. Collision coverage pays for damage to an insured vehicle caused by collision with another vehicle or object. Your deductible will apply to collision coverage.

Comprehensive coverage pays for loss of or damage to an insured vehicle unless is damaged or lost as the result of a collision. Comprehensive would cover losses due to theft, fire, wind, hail, flood, vandalism or impact with an animal. Your deductible will apply to comprehensive coverage.

Uninsured motorist pays for loss or damage caused by another driver who does not have liability insurance. Underinsured motorist coverage pays when the insured driver is injured in an automobile accident caused by a driver who has an inadequate amount of liability insurance. Rental reimbursement pays rental vehicle costs when your vehicle is put out of commission as the result of an automobile accident. Daily monetary limits may apply. Emergency roadside assistance coverage pays towing expenses when your vehicle breaks down. Distance limits may apply.

Your policy will generally cover you, your spouse children and other family members who reside in your residence as well as anyone else who has permission to drive your covered automobile.

Car Insurance Advice for Young Drivers in the UK

Over the course of the last ten years, car insurance for young drivers in the UK has increased substantially.

This has caused many problems for new drivers with premiums averaging £1300 for a newly qualified 17 year old male driver.

Young female drivers pay a lot less for their policies due to their reduced risk of being involved in an accident. EEC law is looking to make this a discrimination issue but insurance companies and representative groups are opposing this move.

The main factors which will effect your insurance premium are listed below;

The Vehicle - Choosing the right vehicle will have a massive impact on your premium. As a guide, look at the insurance group of the car. The grouping structure runs from Group 1 to Group 20 and your insurance premium will increase as you move through the groups. Use the link below to our web site and use the car grouping guide which will give you an indication of which vehicles fall into which groups. Do not however rely on either guesswork or a basic group guide when choosing a car. Even a subtle difference in model of vehicle could effect your premium massively - Get quotes on every type of car you are looking at before deciding on buying one.

Where you live - Not a lot you can do about this but in some areas of the UK you are twice as likely to have your car stolen. In London you are 50% more likely to be involved in an accident - Your premium will reflect where you lice.

Pass Plus - If you have just passed your test, seriously consider pass plus. This will give you discounts of up to 20% off your insurance premium. The course costs £120 so can be very effective at saving you money and improving your driving skills.

Type of Cover - As a first time driver you will normally be restricted to third party fire and theft cover because of the costs involved. Consider third party only cover also.

There are no shortcuts when insuring your first car but there is a silver lining to that horrible first premium. A safe years driving will result in a drop in your premium of around 50% in the following year.

New Car Registrations and Car Insurance

In September 2001 the Driver and Vehicle Licensing Agency (DVLA) introduced a new number plate registration system that was designed to last for 49 years. The new change was welcomed not only by the car dealers but also by the car insurance industry as the DVLA also decided to issue new car registrations twice a year instead of once a year.

In the past, new registrations were issued on 1st August every year. Inevitably this caused a major headache for insurance companies as so many people required insurance at this time. This once a year rush for insurance was compounded by the summer timing when most people, including insurance company employees, go on holiday. Today, the new registrations are issued in March and September. This eases the workload for insurance companies and allows them to more easily staff up for the increase in calls.

Of course, the old system ran for about 38 years and so there is still a large population of people who require insurance renewal on 1st August. So around July, August and September, Insurance companies are still especially busy and you can generally expect long call centre waits with a lot of direct companies.

Using the internet instead is a much easier and quicker way of getting your new car insurance quote. Accept Direct have a very fast online quote system which cuts out the need of waiting for a call centre person to answer. The Accept Direct website is available 24 hours a day, 365 days a year and along with its sister online claims website will deliver you a competitive quote in minutes.

So whether you're looking for a cheap insurance quote for your brand new car or would like to get a low cost renewal, just go to the Accept Direct Car Insurance website at and save yourself some time and money.

Copyright (c) 2004 AcceptDirect.co.uk http://www.acceptdirect.co.uk

Andrew Bowen is the CEO of Accept Direct Limited. Accept Direct offer car insurance to UK customers through their website http://www.acceptdirect.co.uk

Article Source: http://EzineArticles.com/?expert=Andrew_Bowen

The Car Insurance Calculation Explained

Different companies will apply different factors to the way they finally arrive at a price for your Car Insurance. Generally speaking though the concept is the same. This involves collecting various bits of information from you and feeding it through a computer system which adds or takes away money depending on the answers you give.

The value put on these answers is decided by the individual Car Insurance company.

For example, some Car Insurance companies may believe that having a speeding conviction increases your chance of having a personal injury accident in the future - therefore they may add money to your price if you have such a conviction.

Similarly, some Car Insurance companies may decide that because you have a lot of No Claims Bonus Years then you are less likely to claim - therefore they may discount your price. All in all there are around 30 different factors that may affect your final premium. Now you can see why you get such a difference in the price of your Car Insurance by going to various companies. Each company will have it's own view of what they believe should be assigned to each answer you give. The Car Insurance quote you get through the Accept Direct website will look at lots of different Car Insurance prices from lots of companies.

That way you can get the best possible price for your profile.

The Car Insurance Calculation Explained

Different companies will apply different factors to the way they finally arrive at a price for your Car Insurance. Generally speaking though the concept is the same. This involves collecting various bits of information from you and feeding it through a computer system which adds or takes away money depending on the answers you give.

The value put on these answers is decided by the individual Car Insurance company.

For example, some Car Insurance companies may believe that having a speeding conviction increases your chance of having a personal injury accident in the future - therefore they may add money to your price if you have such a conviction.

Similarly, some Car Insurance companies may decide that because you have a lot of No Claims Bonus Years then you are less likely to claim - therefore they may discount your price. All in all there are around 30 different factors that may affect your final premium. Now you can see why you get such a difference in the price of your Car Insurance by going to various companies. Each company will have it's own view of what they believe should be assigned to each answer you give. The Car Insurance quote you get through the Accept Direct website will look at lots of different Car Insurance prices from lots of companies.

That way you can get the best possible price for your profile.

Copyright (c) 2004 AcceptDirect.co.uk http://www.acceptdirect.co.uk

Andrew Bowen is the CEO of Accept Direct Limited. Accept Direct offer car insurance to UK customers through their website http://www.acceptdirect.co.uk

Article Source: http://EzineArticles.com/?expert=Andrew_Bowen

Buy Car Insurance Online-- A Few Tips to Get You Started

There is a large shopping mall online for car insurance. You can buy car insurance online if you understand the process. You have to accurately report your rating information to an online car insurance quoting website. Your accuracy is critical because the data that you give will determine the rate. Truthful and detailed rating information is a must if you are seriously considering buying car insurance online. The process will educate you about your own insurance and will give you confidence to shop online in the future.

Here’s what you need…

1. Driver License – Every resident relative in the household will have to be rated on the policy. You will need the driver’s license number for every individual that will be rated on the policy.

2. Insurance Declarations Page – This page is mailed to you every time your policy renews. It contains all of the insurance information that you will need to enter on the online quoting website.

3. Car Registration Card – The registration card will provide the vehicle identification number. Every vehicle gets its rate from the vehicle registration number. It will indicate the air bags, anti-lock brakes, and any other safety features. These features give you discounts.

4. Property Insurance Policy – The best rates on car insurance are usually multi-policy rated. You might as well get a rate on your homeowner policy and compare and get the multi-policy discount.

Online Shopping for car insurance requires you to provide all the necessary information. The nice thing about online shopping is that you can do it at home and at your convenience. The quotes are usually sent to competing companies and when you receive the quote you will also have the option to e-mail the agent. Agents are doing business online all of the time and they also find it to be a convenient way to do business.

To view our recommended source for insurance quotes, visit these pages Auto Insurance Quote

Affordable Health Insurance

Home Insurance Quote

Article Source: http://EzineArticles.com/?expert=Greg_Haehl