1. How is Insurance Rated?

 a.  Territory--Your zip code determines what territory you reside in.    If you live in Springfield and move to say Auburn, your rate may change.   

 b.  Age –   your age and your driving experience determines the rate you pay. 

 c.  Marital Status—are you single or legally married.  Living with someone for 2 or 10 years does not mean you are legally married according to insurance standards.    

 d.  Insurance is also rated by the violations on your driving record.    The more tickets (also called violations or points) you have—the more you pay for insurance.  Insurance companies see you as a higher risk when you have tickets on your driving record.   Accidents, DUI’s, speeding tickets or other moving violations will give you more points on your driving record.  The more points you have—the more you pay.  An Accident or DUI would probably be 4 points or 5.  A speeding ticket might be 1 point or 2 depending on how fast you were going.  Some companies do not charge for 1 point or 2.   You may also be charged points for an accident that was not at fault, although an accident that was not at fault is charged less than an at fault accident.   If you have enough points on your driving record—we may not be able to insure your car or the price may be more than you can afford.

 e.  Credit – some companies rate your policy by how good your credit is.  If you have bad credit or no credit at all—you may pay more for your insurance.  Not all companies rate by credit—but the majority does.  Insurance companies feel that if you have good credit—you will be a better risk, i.e. a better driver.
 f.   The price of your policy is also determined by the car.  Most companies charge the same price for any vehicle if it is liability only but there are some companies that the rate will change depending on the car.  A Mustang may have a symbol of a 22 where as a Taurus may be a 10.  The Mustang is a high performance car and the Taurus, a safe family vehicle.  The higher the symbol, the higher the price of insurance.  The older the car, the lower the symbol.  A four door car is cheaper to insurance than a 2 door car. Every car is  different. A Symbol----An ISO symbol  (Insurance Services Office) is a rating tool that is used to assign values to vehicles based on the car.  A symbol is given to each car so that an insurance company can rate the policy.  A symbol is created by several factors, what age group drives the car, how often it is stolen, how expensive it is to repair, and the safety of the vehicle, etc.  Some companies do also rate according to the value of the car instead of using a symbol.   Some cars have a high value but may have a low symbol.  It can be very confusing.   This is why when you call around for an insurance price—you get several different answers. 

2. What is the difference between Liability and Full coverage?

 Liability is the damage you do to someone else.  It does not cover your vehicle—for that coverage—you need to have full coverage.   There are two parts to full coverage.  Physical Damage or Comprehensive coverage covers your vehicle if your vehicle is damaged by hail, a tree falls on it or something of that nature.  The collision portion of your policy kicks in when you are involved in an accident.  A liability policy does not have physical damage or comprehensive coverage.  A full coverage policy has liability, physical damage or comprehensive coverage and collision coverage.  There is no deductible on a liability claim.  You pay nothing for damages to another’s persons property or car.    You only have out of pocket expenses when your car is damaged.  This is called your deductible.  Your deductible may be $250, $500.00, or $1000.00.  It depends on what you purchased when you bought your insurance policy.    

3. Why are boys higher than girls?

  Traditionally, males were more expensive to insure than females.  However, we have noticed that the prices are going up for females as much as males.  It was thought that males do most of the driving, have a tendency to speed and don't wear a seat belt.  Females on the other hand have been known to text on the phone.  They are also known to be more aggressive and show signs of road rage. 

4. Can I get discounts on my policy?

 Some companies give discounts for good grades.  Most companies give discounts according to driving record, another reason to drive with care.  Common discounts are also homeowners (if you own a home or mobile home), and prior insurance with no lapse in coverage, and that is still active. 

5. Will my insurance go UP after an accident or claim?....When will the price of my policy go DOWN?

UP? Auto insurance policies are usually six months, but you may have a one year policy if you have an SR-22.  The policy is reviewed after the expiration date and rates are changed accordingly.  If you have had a claim or accident during that six month policy, your insurance could go up at the renewal date.  An insurance company does not raise the rate in the middle of a policy term unless a change is made to the policy, i.e. add a car, or a driver. 

DOWN?   Insurance company’s rates are all different.  There is no set age when the price of your policy goes down although many company’s rates go down after the age of 25.   Your policy may go down at renewal until you reach a certain price point.  It is true that the older you are and the more driving experience you have, your rates will be lower. 

6. How do I maintain the cheapest rate

For better insurance rates, you need to strive for good credit, maintain an insurance policy and a keep good driving record.  Call for prices before you purchase a car.  The rates may be higher than you expect and you may change your mind about what kind of car you want to purchase.