What goes into rates and premiums? It’s a common question; it’s a common issue to bring up to live personnel with insurance companies, and it’s something that really mystifies and confuses people, but it’s actually pretty simple. Your car insurance rate simply reflects a combination of you, your car, and the company that you’re dealing with. And that’s just sort of how the economy and capitalism actually works; people meet in the middle of the market, and they agree on a price, and it’s assumed that that price, in this case, the premium, is a numerical symbol of an agreement; whether that quantity is in any way accurate in the way that it is related to either of the three entities is definitely up for debate, but let’s delve into this a bit. How is this representative of you? Well, for one, riskier drivers will be charged a higher rate and premium.
September 1, 2010
