Why do companies charge different rates for
different cars, drivers and situations?
Rates are based on statistics involving a company's experience with different cars,
drivers and situations. For instance, some vehicles cost more to repair than others, some
are more likely to be stolen and, according to statistics, some are more likely to be
involved in accidents. Some people drive many more miles than the average, increasing the
likelihood that they'll be involved in an accident. Other drivers have very little annual
mileage, decreasing the likelihood of an accident.
The more you are on the road, the higher your chances of being involved in an accident.
The same principle applies to commuting. If the majority of your driving is spent in
commuter conditions (increased congestion, people rushing to get to work, inattention due
to familiarity with roads) you're more likely to be involved in an accident than someone
who is traveling in off peak traffic hours.
Bear in mind that where you live is only one factor that goes into determining your
insurance rates. For example, statistics have shown that those who live in more
traffic-congested areas tend to have more frequent but less severe accidents, and those
who live in rural areas tend to have fewer but more severe accidents.
In general, lower mileage does mean a lower rate. But mileage is not the only factor in determining rates. Rates are also based on age groups and the statistics which show the
likelihood of accidents within these groups. Statistics show an increase in the number of
accidents per miles driven for those over age 75, which results in a higher rate. However, some companies do offer a discount to older policyholders who limit their driving.
A spouse living in the household is automatically insured because of the way the policy
provisions are written. Also, legally, if your spouse is insured separately with lower
limits than yours and has an at-fault accident, your insurance company may be held liable
for amounts over your spouse's coverage to the limit of your policy. For example, if your
spouse carries $100,000 liability and you carry $300,000 and your spouse has an at-fault
accident resulting in $150,000 in damage and injuries, your insurance company can be held
liable for the $50,000 your spouse's policy does not cover. This is a liability for which
your insurance company is not collecting premium because the unlisted spouse is not
include in the rating of the policy. *Courtesy of the Independent Insurance Agents of America - www.iiaa.org
A spouse living in the household is automatically insured because of the way the policy
provisions are written. Also, legally, if your spouse is insured separately with lower
limits than yours and has an at-fault accident, your insurance company may be held liable
for amounts over your spouse's coverage to the limit of your policy. For example, if your
spouse carries $100,000 liability and you carry $300,000 and your spouse has an at-fault
accident resulting in $150,000 in damage and injuries, your insurance company can be held
liable for the $50,000 your spouse's policy does not cover. This is a liability for which
your insurance company is not collecting premium because the unlisted spouse is not
include in the rating of the policy. *Courtesy of the Independent Insurance Agents of America - www.iiaa.org
A spouse living in the household is automatically insured because of the way the policy
provisions are written. Also, legally, if your spouse is insured separately with lower
limits than yours and has an at-fault accident, your insurance company may be held liable
for amounts over your spouse's coverage to the limit of your policy. For example, if your
spouse carries $100,000 liability and you carry $300,000 and your spouse has an at-fault
accident resulting in $150,000 in damage and injuries, your insurance company can be held
liable for the $50,000 your spouse's policy does not cover. This is a liability for which
your insurance company is not collecting premium because the unlisted spouse is not
include in the rating of the policy.
Automobile policies are written to automatically cover any licensed relatives living in
your household. Therefore coverage is afforded to them, via your policy, regardless of
whose vehicle they are operating.
For example, your son is away at college and has an accident while driving a friend's
vehicle He is covered by your policy for damages for which he is legally liable. Sounless
household members have vehicles registered and insured in their own name, they need to be
listed on your policy. Also, be aware that many companies offer credits for young drivers
such as good student and driver training credits. 
Why is the cost of my auto insurance affected by where I live?
As I grow older and drive less, can I save money? Or will my
insurance go up due to age?
What steps can I take to reduce my rates?
How does adding drivers to my policy affect my rates?
Why does my spouse have to be listed on my policy?
Why do I have to list young drivers on my policy, even if I don't allow them to drive my vehicles?