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Article 2 of 4 in How Rates are Determined |
How your car model affects your insurance rates |
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Insurance rates are certainly affected by the type of car you drive, but probably for different reasons than you think. Most of us think that if you drive a sports or high performance car, you will pay more for insurance. While that may be true, it is not always the rule. In fact, comprehensive and collision insurance premiums are mainly calculated by looking at the vehicle’s loss history, which is how often that model is stolen and how much it costs to repair or replace it after an accident.
How it works. Most insurers use actuarial companies that rate cars on several factors to determine the cost of comprehensive and collision coverage needed to minimize an insurer’s risk. The ISO, or Insurance Services Office, is the main actuarial company used by many insurers to obtain those rates. Basically, the ISO assigns each vehicle a risk number and insurers then use that number to price their policies. Unfortunately, these numbers are not made available to the public.
Get a rate beforehand! Even though many of these ratings are not publicly available, consumers can still beat the system by contacting an insurer BEFORE purchasing a car to find out what it will cost to insure that car. For a free quote, go to the Auto Insurance Center.
Special not on SUVs. Aside from high performance and sports cars, insurers are beginning to pass along insurance charges on sport utility vehicles (SUVs) to their consumers as tests have shown that SUV’s generally cause more damage when in accidents than passenger cars – something to consider when you are shopping for vehicles.
Click here, for more information on how car insurance rates are determined. |
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