The new adjustment factors of Auto Insurance Rates

Within the last 10-15 years new factors affecting auto insurance quotes started emerging. Vehicle insurers are looking at additional determinants as well as traditional driving history, the vehicle and personal circumstances like address and auto usage. A few companies can place higher importance on this new information they obtain. Therefore, motorists should start paying attention to them in order to stop premium increases.

Credit score check is one of the new information companies pay close attention. Some policyholders report as much as twenty five percent sudden increases in the renewal quotes without any apparent reason. When they dig into the reasons they find out that deteriorating credit history is the cause.

Companies believe that financially stable policyholders are less risky. They believe that people with money problems will not maintain their automobiles properly and this will increase accidents. They may be keener to make a claim even for small things since the money is tight. Also, they do not want to deal with possible late payments and policy cancelations.

Another area under scrutiny is the education and profession of the applicants. Living in a better neighborhood and driving safer cars are the traditional signs related to wealth. Now, they look at the education, profession and homeownership as well. The better those particulars are the lower the costs of insuring autos.

Some experts see a problem with this trend since it appears to be punishing the poor. According to recent surveys, some of the top auto insurance companies can charge as much as thirty percent more to a driver with less privileged background. Several top companies offered much higher rates to a single parent, renting in a less popular residential area with an average job than to a married person with homeownership and more respectful job and education.  Even worse, these better rates continued when the former has no claims but the latter had minor claims.

Companies’ response to these allegations of treating the poor less favourably is simple. They point out that selling policies is a business and the decisions are taken based on merits not prejudice. They say that they look at many variables when they are setting up their premiums. If the indicators show that homeownership, better education and respectable job means lower accidents and claims their decisions are justified.

There is no way of winning against these financial conglomerates. The best thing to do is to present yourself better and do not give them an excuse to hike your premiums. This may not be possible in some cases like when you lose your job. The wages would stop coming and if you do not have savings to tie you over until employment you will probably miss payments.

However, people can look after their finances a bit more attentively and plan ahead for hard times. Furthermore, there could be other ways of bringing the increased rates straight back down. The first one is to shop around. There are still a few companies out there who mainly look at the traditional methods. Checking for better car insurance quotes online can reveal who they are quickly. Policyholders should not hesitate to take the fight back to their current insurers when they see they are being penalized for something other than their driving history.


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