Solomon Islands Finance

Feb 13 2018

Cost of Auto Insurance, automobile insurance costs.#Automobile #insurance #costs

Cost of Auto Insurance

How does my auto insurance company decide what it charges me? That’s probably the most asked, least understood question about motor vehicle insurance coverage. Each insurer has thousands of auto insurance rates in every state it does business rates for each type of car, each driver and every geographical area in the state. Each company also has its own surcharges and discounts available that impact these rates.

Most insurers have three basic goals in mind:

They need to make enough money to cover all their policyholders’ claims and pay their overhead expenses (staffing, light bill, phone bill, etc.), and if they’re publicly held, still have enough money left over for their shareholders.

They want to balance their risk by charging higher rates to drivers who file more costly claims, more often and lower rates to those drivers who file less expensive claims, less often.

They want to stay competitive with other insurers in the markets they do business.

State Government Regulations

How your insurance rates are set also depends in part on which state you live in, because rates are regulated on a state-by-state basis. The insurer has to follow the regulations of the state you live in. Click on your state below to contact your state insurance department.

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