Several factors go in to the rates you receive for your auto insurance policy. Craig Wiseman breaks these down in this video.
Here's a full transcript of the video.
In this video, I'd like to talk about rating on auto insurance and just exactly what affects your rate and what the insurance companies look at and all of the factors that go into rating a personal auto policy.
The first thing obviously that goes into rating an auto policy is whether you've had any tickets or accidents. Tickets and accidents obviously are something that the insurance companies all charge for — and especially as a new customer coming to a company, they are going to rate accordingly, depending on your driving record. As far as accidents go, the insurance companies all report to a central reporting agency called CLUE. And so, they have access to all of your accident information, claims information, that you've basically ever had. And that goes into the rating of your auto policy.
Another huge factor in rating personal auto policies is your insurance credit score. Your insurance credit score is basically generated off of your credit. When the insurance company runs an insurance credit score, however, it doesn't show up as a hard hit on your credit. So it doesn't affect your credit poorly. It just takes a snapshot. That can drive an insurance rate from what would be a standard rate to as high as three times that rate, depending on your credit. So a good reason to try and keep credit as clean as possible.
Another factor in determining rates is whether or not you've had prior insurance. The insurance companies assume that if you've been responsible and had continuous prior insurance coverage, that you're probably less likely to have an accident. Statistically, that's just the way it works out.
Another newer factor in rating personal auto policies is whether you're purchasing coverage in advance or not. A lot of companies provide discounts if you're purchasing coverage at least 10 days in advance. Some a little bit more, some a little bit less. But if you are thinking ahead and purchasing out into the future, you're gonna get the best rates.
Other things that affect your rating are deductibles. Obviously, the higher the deductible, the lower the cost. So your premiums for comprehensive and collision are determined based on the size of the deductible that you take. You want to try and take as big of a deductible as you can afford.
Another discount that's available with several companies is a Paid-In-Full discount. So if you can pay that 6-month auto premium or that 12-month auto premium in full, a lot of times you can see huge discounts for that.
Another way of lowering your rate is by putting both your homeowners policy and your auto insurance policy with the same company. Homeowners meaning your actual homeowners policy or your renters policy or your condominium policy. Keeping those all with the same insurance company will give you generally the best rates.
Again, thanks for watching and feel free to give me a call if I can help you. Craig Wiseman at Wiseman Insurance, (801) 377-3060. Thank you.
(Transcript Courtesy: Speechpad)
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