How Insurance Rates are Determined
I’ve previously written on what you should be looking for when purchasing insurance and as part of that blog I included an article about which insurers are considered to be the best. It’s not unusual for insurers to utilize a lot of different information to determine what rates to charge people, but I think that most of us expect that it is our driving record and age which determine what our rates are going to be for automobile insurance (after all, one of the few benefits of getting older is a lowered insurance premium). Evidently that is not the case as Consumer Reports just discovered when they conducted an investigation of rate pricing. What is surprising about this investigation is what it found. Evidently, some insurers are using information about education level and income to set rates for individuals. What does education and income have to do with setting insurance rates? Quite simply nothing, and that is why you should be aware of this information when you are checking car insurance rates. After all, if an insurer is willing to punish you for not going to college or for making minimum wage, what is that insurer going to do when you need them to step up to the plate and protect you with the policy you have purchased? The last thing you need if you have been in a collision as either the victim of the collision (where you might need the underinsured or medical payment benefits of your policy for yourself) or the negligent driver (where you need to have your insurance pay compensation to the injured person in order to protect your assets and money), you need to have the peace of mind that your insurance will do the right thing when you need them.