Auto Insurance Code

What is an auto insurance code? An auto insurance code is essentially the thing that dictates how much you're going to pay for your insurance. This article will inform you on how the code is compiled, as well as how various auto insurance companies might differ in the code they assign you.

What factors go into it? There are many things that go into figuring an auto insurance code, and this article mostly serves as a way for you to get a rough idea of how it all works, rather than an exact estimate of your code. In order of the most important to the least important, factors that affect your code are as follows.

1.The state in which you live. This is the most important factor, for the reason that you are only as good of a driver as the other people on the road allow you to be. The states with heavy traffic all the time have the highest rates. The top three are New Jersey, New York and Washington, D.C.; in those states you'll pay almost double what you'll pay in Iowa.

2.Your age. It's commonly known that teens pay more for insurance, because they're more likely to get into accidents. And thus, it makes sense that your age is a factor when looking at your auto insurance code. Auto insurance companies have observed that people 75 or older get in the most accidents. Following are those between 16 and 24 years old. Then come 64-75, then 50-64, and finally those who are 25-49 years old, who have been observed to get in the least accidents.

3.Gender. The joke between men that 'women are bad drivers' is officially exposed. On the whole, women are known to get in less accidents than men, particularly when looking at teenagers. So if you're a male - particularly a teenage male - expect to pay more. An interesting fact, though. Teenage males that are married have been observed to get in less crashes than single teenage males.

4.Driving record. It's good to avoid crashes, if for no other reason than to not raise your insurance! Granted, the lost vehicle/life often is something to value, too. The way the insurance companies see it, the more crashes you get in, the more likely you are to get into more crashes, and they up your rate accordingly.

5.Credit history. This one seems like it wouldn't have anything to do with how likely you are to get into a crash, but nonetheless, it costs insurance companies more to insure someone with bad credit.

6.Your car. The make and model of your car is also used by the insurance company to see thing like how much your car will cost to repair, how often similar cars get into accidents, etc. (A Lamborghini might cost a little bit more to insure than a Honda)

What are you left with?

After they've taken everything into account, the auto insurance company will give you your code, which is typically between 1 and 27. The objective is to have a low number, being that your auto insurance code is multiplied by the company's "preferred profile" rate, which could be looked at as the equivalent of a "1". For example, if I have an auto insurance code of 5, and the preferred profile rate is $100/year, I'll be spending $500/year.

What's the next step?

Well, all auto insurance companies use the same factors to create their codes. However, different companies don't way the same factors equally. Whereas you might be assigned a 1.5 at one company, you might be a preferred profile at another. And it is because of this that it's important to shop around before buying insurance.