I get calls in my office once in awhile from clients who want to know how their pricing on auto insurance is determined.  This simple question does not have an easy answer.  There are dozens and dozens and dozens of factors that are taken into place to price a policy.

You know many of them.  The age of the driver, the year make and model of vehicle, claims history, and driving record are ones that most people know about.  There are many more that you undoubtedly don’t know about.

Credit is the one that people are becoming more accustomed to.  Prior insurance is another you may not know about.  Did you know your prior insurance limits play a role when you are shopping for a new policy?  Whatever your liability limits were on your old policy, play a role in pricing a new policy.

Two other ones that affect premium are prior severe damage to a vehicle and salvaged titles.  Vehicles that have been severely damaged statistically end up in more claims and costing the insurance companies more money.

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