Rating Factors For MD Auto Insurance
Rating Factors For MD Auto Insurance
Rating Factors For MD Auto InsuranceWhen you are shopping for MD auto insurance there is no doubt you are looking for the most comprehensive coverage at the lowest monthly price. During the quoting process, insurance companies use a number of different factors to rate their policyholders. These rating guidelines are a type of insurance formula that determines how likely you are to file a claim. If you are seen as a higher risk for a claim, you will experience higher premiums than those who are rated as less likely to file a claim. If you have an understanding of these ratings you will be able to distinguish why your premiums are higher or lower than your family or your neighbors.
Vehicle Ratings
In a policy, vehicle ratings are extremely important. The insurance company will use the year, make and model of your vehicle to determine your premiums. While some drivers assume that a newer vehicle is more expensive than a vehicle that is several years old, this is not actually correct. Vehicle ratings are determined by the symbol of the vehicle. The symbol is calculated based on how many accidents the vehicle is involved in, how much damage they cause to other parties and how much they cost to repair on average. Amazingly, a very inexpensive vehicle like a Honda Civic, could cost more to insure than a luxury model.
Usage
Another important factor that is overlooked is the usage of the vehicle. Policies are rated for three different types of use: commute, pleasure and business. Business use is classified as the highest premium. This differs from a commute, as a businessperson will travel to multiple locations throughout the course of the day. Pleasure use is the lowest in premium because drivers are not dealing with stress or commutes during busy traffic times of the day. Studies have shown that drivers driving their vehicles for pleasure less than 10,000 miles a year are far less likely to be involved in an accident in comparison to commuters.
Experience of the Driver
While many assume that the driver's age is taken into account for policy rating, this is entirely untrue. Ratings for MD auto insurance are based on driving experience rather than age. The years the driver is licensed is used to calculate experience ratings and premiums. Understandably, drivers with more driving experience are seen to pose a lower risk than those with less experience. Safe driver discounts and good student discounts are available for those who qualify to lower high premiums.
Understanding how you are rated on an MD auto insurance policy is important. There is a common misconception that your driving record is the only thing considered to calculate your premiums. While your driving record is important, there are several different factors used to determine your rate.