Car Insurance PremiumYou pay a lot of money on car insurance premiums, don’t you?

Do you ever wonder how your insurance premiums are determined?   Ever wonder who controls your premiums?

Your car insurance premiums are determined by many factors.  Some of the factors you have complete control over.  Of course some of the factors you or your insurance agent have little or no control over.   Let’s look at both sides.

Factors That Determine Insurance Premiums

Things You Control

Your driving record.

  • You control how many car accidents you have and how many tickets you get.

Your credit history.

  • Your credit score is very important to insurance companies.
  • Insurance companies judge low credit scores to be irresponsible.
  • Insurance companies ask: if you are irresponsible with your credit, will you also be irresponsible with your driving record…?
  • You control what your credit score will be….you may not think you control your credit rating, but you do.

The car being insured.

  • You control the car you buy.
  • The car determines the insurance premiums.
  • The year, make and model of the car being insured determines the premium.

Your insurance coverages.

  • You control which coverages you select.   You control your deductible.
  • Each coverage within your car insurance policy protects a different part of the claim.
  • Collision coverage pays for damage to the policyholders car if in an accident while the car is moving. comprehensive covers other types of damages to the insured’s car; such as, hitting a deer, windshield cracks, damage to paint on the insured’s car.
  • Those are just a few examples of the coverages included in your insurance policy that you have available when you have a car insurance claim.
  • Liability coverage pays for damages to the other parties physical damage and bodily injury.

What Your Insurance Agent Controls

  • Not too much.
  • Your car insurance agent can interpret the insurance language of a policy and explain to you what makes up your premium.
  • The agent can explain how the actuaries arrived at the insurance premiums – but they do not control pricing.
  • Your car insurance agent doesn’t control pricing, but there is a lot that your car insurance agent is responsible for.
  • The agent has to service policyholders on their car insurance premiums and car insurance claims.
  • They have to sometimes work with the claims departments to resolve issues between policyholder and insurance company. And they answer questions from the policyholders if the policyholder does not believe the car insurance premium to be accurate.