A “misquote” is what happens when your actual insurance premium costs more than your agent originally estimated. Policy premiums are determined by many factors, including where you live, the kind of car your drive, how much you drive, how much coverage you want, your driving record, and your age. If errors are made when giving this information to your insurance company, you won’t be given an accurate quote.
Pa. auto insurance misquotes can also occur if the information you put on your application differs from your actual driving record. Insurance companies verify drivers’ records with the states’ motor-vehicle divisions. If you told your insurance agent you have a perfect driving record, and you don’t, your insurance company will end up charging a higher premium than the one that your agent initially quoted.
To avoid misquotes, provide accurate information about your driving record and any other facts affecting the cost of insurance, such as the make of your car or how far you commute to work. Verify all information before signing the application.
Determining your premiums
The premium you pay consists of a “base rate” plus or minus amounts reflecting your age, gender, marital status, driving pattern, vehicle type, driving record, and claims history. There is a different base rate for each type of car and geographical area. While individual companies may differ in the amounts they assess for each factor, the major rating factors are fairly universal.
- Your age: Statistics show that, as a group, drivers under age 30 and over 75 have more accidents per mile driven than the general population. Therefore, these drivers are usually charged higher rates, as are families with young drivers in the household.
- Your gender: Young men are involved in more accidents per miles driven than any other population group. The difference is especially pronounced for male drivers under 30. Insurance companies are allowed to charge on the basis of gender and age where the actual proof of differences in risk exists.
- Your car: Generally, the more expensive your vehicle, the more you will pay for comprehensive and collision coverage. Also, because sports cars and high-performance cars tend to get into more accidents, cost more to repair, and are more likely to be stolen, they usually cost more to insure.
- Your location: A higher number of accidents in a geographic area will increase both your liability and collision premiums. Higher crime rates in urban areas can raise your comprehensive premiums. The law allows companies to base your rate on your address (garaging territory), even though you may actually drive in more urban or rural areas.
- Driving patterns: The more miles you drive, the higher your rates will be. A car used for a total of 7,000 miles a year would normally have lower rates than a car driven 35,000 miles a year. The miles that you commute to and from work is counted in addition to non-commuting, “pleasure” miles.
- Your driving record and claims history: Most companies apply a surcharge to drivers who have been involved in an accident or convicted of multiple traffic violations. Also, the more claims you have made, the higher your rates are likely to be.
What about my credit rating?
Insurance companies do check your credit rating when determining your insurance premium rate. Statistically, people with poor credit have been found to file more claims than people with good credit. Making sure that you have a good credit rating will help to keep your insurance premiums down.
Things to keep in mind
Ask about policy discounts such as multiple policies with the same company, multiple vehicle discounts, airbags, anti-theft device, etc. Also check about any surcharges the company applies. Not all companies will offer the same type of plans or have the same underwriting rules (eligibility/acceptability guidelines). Therefore, it is critical to ask for this information.
Make sure you know the length of the policy term. Policies can be six months (semi-annual) or one year (annual), depending on the insurance company.
Many Pa insurance companies have their own payment (installment) plans that allow you to pay the premium over a period of time, sometimes for a fee. If you decide to buy a policy on an installment plan, find out the applicable service fees.
Ask your agent about higher deductibles on your policy. Higher deductibles on comprehensive and collision coverage will lower your premium costs. Remember, though, that a higher deductible will mean that you have a higher out-of-pocket expense if you are involved in an accident.