auto insurance underwriting
In the days before computers, auto insurance, personal and subjective. The insurance agent actually talked to the man he met at the main office, called in some favors, and their best customers the best prices. Male drivers under 25 were charged a lot. Young women are perceived as lower risk, were charged much less.
Now, on to the computer age, auto insurance companies have large databases of accident and claims records. As these records do math can tell what kind of person is more likely to be a good driver and what kind of person is more likely to be an accident risk. This "Black Box Technology" gives ideas on the background and behavior of people who think they have to pay more for their auto insurance. For example, people who carry minimum limits of liability are actually a greater risk than those who carry at least 50/100 ($ 50,000 per person, $ 100,000 by accident). And statistics have shown that those with bad credit ratings are more likely to be involved in accidents.
In Texas, the minimum limit of liability on auto insurance is 20/40. Yep. $ 20,000 per person, $ 40,000 per accident. Not much right? And if that were not enough, the minimum property damage is $ 15,000. I guess that makes the difference if you're in an accident is your fault?
In most states, insurance car is regulated by the state. But that's just the beginning. The state uses tables of 'loss ratios, exposure, and other words of magic, to justify what the auto insurance companies want you to pay. Occasionally, only to lose you even will be released throughout the state REDUCTION in auto rates. When they do have in your wallet!
After the state sets the base rate, individual firms to negotiate with them to adjust their particular rates, claiming a loss rate or better or worse than average. Thus, after the elections, the legislature allows exceptions, amendments and notes to take back to something the insurance companies car can do a lot of money.
And there's more. Most states allow individual companies to establish their own rules to determine who gets charged what. Thus, an automobile insurance company rates a particular driver one way, while other types of enterprise in the same driver differently. Each company sets underwriting standards.
So how are auto insurance rates determined? First, the state usually gets involved. Then companies toss the dice between being competitive and doing and gain all they can for their shareholders. Finally, now that the "Black Box" is here, the automobile insurance companies are taking a closer look at all drivers. Training, credit, history, even living in the city helps 'drive' rates. They have even found that those who select low limits of liability are greater risks than those who choose higher limits. Thus, increasing the limits of their responsibility, you can actually lower your auto insurance rate.
For some, the new "Black Box technology 'reduces rates up to 20% in companies not using it. The bad news is, since credit rating plays a part number car insurance for ALL, the worst of your credit score, the higher your car insurance will go. No more funding 'discounts', no more' loyal customer "and the like. You will be evaluated even in your underwear, placed in a group of drivers almost identical to you and charges accordingly.
About the Author:
Gillian Gunner is a writer, software author and webmaster. She writes on subjects connected with personal finance, lifestyle and new technology. She has contributed to Auto Insurance Now
Article Source: ArticlesBase.com – Auto Insurance Black Box Technology Meets Your Darkest Fears
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