How Are Auto Insurance Rates Calculated?State law often limits the specific rating factors that may be considered for auto insurance. The rates and rating factors for auto insurance must be filed with the insurance regulatory agency for each state where the insurance is to be sold. In some states, the rates must get regulatory approval before they can be used. What Are Some Commonly-Used Rating Factors?For auto insurance policies, insurance companies have a range of premium levels (i.e. rates) they charge individuals based on which classification they fall under. Once you submit an application for auto insurance, your classification is determined from various rating factors used by the insurance company. Examples of common rating factors include: - Applicant¿s driving habits/history
- Number of miles the car has been driven
- Whether the vehicle is used for business
- The age and model of the vehicle
- Whether the applicant has recently been convicted of a traffic violation
- The age and gender of the applicant
Are There Any Limitations On What Insurance Companies Can Charge For Auto Insurance?Any classifications that may increase an applicant¿s insurance rates must be reasonable and related to the risk being insured. For example, raising a policyholder¿s automobile premium rates based on his age and sex is considered reasonable even though there may be discrimination against good young drivers. A higher premium is justified for young male drivers, because they have the highest probability of getting in an automobile accident. Do I Need An Attorney If I Feel That My Insurance Company Is Charging Me Unfair Auto Insurance Rates?Automobile insurance policies are very detailed and complex documents. An experienced insurance attorney can interpret your policy and advise you whether the rates charged to you are unfair or not. In addition, if your insurance company suddenly increases your rates without good reason, you should retain an attorney to determine whether such an increase is unreasonable. |
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