Rating Territories
The place where you park and how much you drive your car
affects the cost of your insurance. Although the general concept
of insurance is to spread the risk of losses among a large
number of people, premiums are adjusted for smaller sub-groups
of risks in certain areas, such as counties, that will have
more similar experience statistically than that of all the
policyholders in a larger area, such as a state. Because of
its size and diversity, most insurers divide the each state
into separate rating territories.
In highly congested urban areas, where there is a greater
likelihood of auto insurance policy losses, auto insurance rates tend to be higher
than for suburban and rural areas. For example, auto insurance rates for comprehensive
coverage are higher in urban areas due to the higher rates
of auto theft in these areas. Increasing costs of payments
made under auto insurance policy claims, including the costs of liability
suits, medical expenses and legal fees, as well as the incidence
of fraud, also contribute to premium costs.
Type of Car
As discussed previously, the cost of your auto physical damage
insurance (collision and comprehensive) varies widely, depending
on the make and model of your car. Auto Insurance policy premiums will
generally be higher for cars that have higher purchase prices
or repair
costs. Cars that are less expensive or easier to repair will
usually cost less to insure in contrast to vehicles of similar
cost and age with poorer repair records.
When shopping for a new or used car, it is best to check with
your insurance professional to verify the cost of insuring
the particular vehicle you are considering purchasing.
Differences in Auto Insurance Rates Among Insurers
There is active competition among auto insurers in each state.
Auto Insurance Rates can vary considerably
among
insurers. The differences in auto insurance rates are based, among other
factors, on the specific experience of the particular insured
group a company covers.
Therefore, it is always a good idea to obtain auto insurance quote from
several insurers. Consumers who shop get better value for their
insurance dollar than those who do not. Many of the companies
listed are part of groups that include several affiliated companies
under common management.
Don’t Shop By Price Alone
Price is only one of many factors to consider in selecting
an insurance company. Consider insurance company claim practices,
reliability, the services provided by agents, brokers or insurance
companies,
and the particular coverages the company offers to meet your
individual needs.
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