What are Individualized Insurance Rates?

 In Local Insurance, News & Updates

Individualized Insurance Rates from The Ostic Group

One of the today’s great mysteries for car owners has been the process used to calculate the cost of their individual automobile insurance policy.

In the past, insurance companies have all generally used a class rating system to calculate insurance policies. This class rating depended on a small number of variables to develop the correct rating class for the vehicle being insured.

Some of these rating factors included:

  • Age of the driver if under age 25
  • Sex of the driver if under age 25
  • Marital status of the driver if under age 25
  • Number of years Licensed
  • Claims and conviction Experience
  • Annual distance driven for the vehicle
  • Daily commute distance for the vehicle
  • Is the vehicle used for business purposes

These factors were used to develop the rating class and driving record that was used to determine the insurance cost for your vehicle. Your location and the vehicle being insured also has an impact on your insurance cost.

If the primary driver on the policy was under 25 years of age, then their age, sex, and marital status were the only factors used in the determination of the assigned rating class. If the primary driver of the vehicle was over 25 years of age, then the use of the vehicle determined the rating class assigned to the vehicle. The number of years licensed, along with the driving history of the drivers, are used as rating factors for all drivers to determine the driving record used, regardless of age, sex, or marital status.

Recently, some of our automobile insurance companies have launched an individualized rating system that reflects your own personal profile and driving habits. Multiple factors are now being used to develop a rate for you, resulting in a premium that is as individual as you are. How these factors impact your insurance cost will be dependent on your specific information.

Age, sex, and marital status will still be included in the process to determine the insurance cost for your vehicle, but they will not be the only factors used.

Individualized insurance rating is the way of the future, as it will be a more accurate way of determining your insurance cost. As has always been the case, the most important variables to keep your rates low are avoiding traffic tickets and accidents.

We recommend that you contact us to ensure that we have your current and correct information on file. Minor changes to your information can change the premiums you currently pay and we want to make sure you are getting the best possible bang for your insurance dollar.

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