Auto Insurance: Question For Those Who Know Industry Practices

[Dr. Dolittle]

I'm trying to save what I can on car insurance. Are premiums based on the car, the driver, or both? I have an 18 year old and a 20 year old daughter - should younger, higher risk drivers always be put on the least expensive cars or does that not matter? Is there an annual mileage cutoff where you would save on premiums (tell them you drive that car 13000 miles instead of 15000)? Is there a standard age where it's cheaper to put them on their own policy instead of keeping them on the family policy?

Obviously I can't call my company and ask them to help me "cheat" on my policy declarations so I'm turning to you folks for help. Thanks!

 

[STEVE07]

The high risk drivers should be named as casual drivers on the vehicle with the least amount of cylinders and the rate will be lower if it is a sedan ,not a coupe.If it is an s.u.v. the rate will be higher as well

 

[TXMikey]

Doc, it depends on your state and insurance company on how those things may affect your premiums. With that said, the answer is all those items may have a bearing.

Ins. Cos. are gong to look at the driving records of all drivers listed in the household, and a portion of the premium determination may be based on that. The age and type vehicle also plays a part in premium. It's not necessarily based on whether it's a sedan or coupe; 4-cyl or V-8. Car premiums are based on frequency that type vehicle is involved in accidents, how often they are stolen, what it costs to fix them, How much damage they may cause to other vehicles, and how badly people are injured when riding in them.

Some companies are marketing a "pay as you go" type premium based on average annual mileage. Some may also requre the young drivers be rated on the newest vehicle. Males under 25 will likely have higher premiums than females under 21.

The amount of liability limits and damage deductibles, and whether you insure your home with the same company will also affect your premiums.

Best thing to do, if your insurance company has them, is to talk to your local agent. They often provide much more info than you might realize.

 

[haroldt]

Doc - here in Florida it matters not. The insurance company will rate the situation. In other words, does the kids have their own car titled in their names. If so, the rate is adjusted accordingly - in this case higher since it's their car and they would have 100% access to it. On the other hand, if you hold all titles, the company will still rate for the fact that the kids still have access. So if you have 3 cars, the premium will be adjusted on all 3 cars with the rotten kids having access.

As for "cheating" on your premium, it's kinda like Vegas - the odds are stacked against you. Should you tell "Sifting Sands of Egypt Insurance" that Suzy drives the 79 Pinto, yet she is involved in an accident in the 06 Caddy... they may investigate. Should they find that Mom drives the Pinto and Suzy is always in the caddy; they will drop you and you are out of luck. This is why they rate ALL drivers for ALL vehicles. That way they don't have issues when a claim comes in.

The post above from TX gives a lot of good info - hjt

A Friendly Reminder - Harley Davidson Community

 

[KingHeritage]

Insurers in NJ are also using your credit rating to determine rates.What one has to do with the other doesn't make sense to me but they'll do anything here to charge you more!

 

[STEVE07]

Insurers in NJ are also using your credit rating to determine rates.What one has to do with the other doesn't make sense to me but they'll do anything here to charge you more!

A friend who has been an insurance broker for a number of years once told me they do this to determine the likelyhood of the policy holder commiting insurance fraud

 

[threesteps]

Insurers in NJ are also using your credit rating to determine rates.What one has to do with the other doesn't make sense to me but they'll do anything here to charge you more!

You bring up some interesting info. There are some efforts, don't know how big or effective, to restrict the use of not just your credit rating but specific credit info, a late mortgage payement for example, from determining insurance premiums. Haven't heard the arguments from either side but is seems a little odd to use the info this way.

 

[Dr. Dolittle]

Doc - here in Florida it matters not. The insurance company will rate the situation. In other words, does the kids have their own car titled in their names. If so, the rate is adjusted accordingly - in this case higher since it's their car and they would have 100% access to it. On the other hand, if you hold all titles, the company will still rate for the fact that the kids still have access. So if you have 3 cars, the premium will be adjusted on all 3 cars with the rotten kids having access.

As for "cheating" on your premium, it's kinda like Vegas - the odds are stacked against you. Should you tell "Sifting Sands of Egypt Insurance" that Suzy drives the 79 Pinto, yet she is involved in an accident in the 06 Caddy... they may investigate. Should they find that Mom drives the Pinto and Suzy is always in the caddy; they will drop you and you are out of luck. This is why they rate ALL drivers for ALL vehicles. That way they don't have issues when a claim comes in.

The post above from TX gives a lot of good info - hjt

Curious - does this in effect "black list" you and cause your premiums to be higher at your next company also?

 

[The4opps1]

In my home state (NJ) we have some of the highest insurance rates in the nation. Having sweated through 2 kids coming of age and learning how to drive, I can share your pain. I don't know if things have changed since my kids moved out and went on their own, but back a few years, merely having them in the same house had the potential of raising your rates. At that time, the best way to go was to have them get their own insurance policy, independent of yours.

There's nothing wrong with calling up your insurer and going over various scenario's with them. Yes, they want your money, but they also want to reduce risk, and also keep you as a customer.

 

[NEWHD74FAN]

As Smitty says, insurance companies have a nice thing going with state and feds...mandated laws that you must have their product, and essentially no restrictions on what they charge you for services rendered (if they even deliver when you actually need 'em). Kinda like the banking, credit card and wall street institutions...just follow the money. I thought it was funny that NY Stock Exchange was "non profit" as was Fannie Mae and Freddy Mac...only no one is laughing now!