Black Box Auto Insurance
So what is all this about the use of Blackbox technology in the estimation of auto insurance rates these days - when did this all start and how does it work - and most importantly, how does it affect you and your auto insurance quote?
Back in the times before computers, auto insurance was personal and subjective. The insurance agent truly talked to the man he knew in the office, called in a few favors, and got their best customers the most effective rates. Male drivers beneath twenty five were charged a lot. Young females, being perceived as less risk, were charged much less.
Now, in the pc age, auto insurance firms have large databases of accident and claims records. By variety-crunching these records they can tell what type of person is more likely to be a good driver and what sort of person is more likely to be an accident risk. This â¬ËBlack Box' technology gives them insights into the background and behavior of the folks who they suppose should pay more for his or her auto insurance. As an example, folks who carry minimum limits of liability are literally a bigger risk than people who carry at least 50/100 ($50,000 per person, $one hundred,000 per accident). And statistics have shown that those with bad credit scores are more likely to be in a crash.
In most states, auto insurance is regulated by the state. But that is only the beginning. The state uses tables of \'loss ratios\', exposure, and different conjuring words, to justify what the auto insurance firms wish you to pay. Each once in a whereas, just to throw you off, they can even announce a state-wide REDUCTION in auto rates. When they do, hold onto your wallet!
When the state sets the base rate, the individual corporations negotiate with them to adjust their particular rates, claiming either a better or worse loss ratio than average. So, once the elections are over, the legislature permits exceptions, amendments, and endorsements to jack them duplicate to something the auto insurance companies can build a large amount of cash from.
And there's more. Most states enable individual firms to set their own rules to see who gets charged what. Thus, one auto insurance company rates a explicit driver one means, while another company rates the same driver differently. Every company sets those underwriting rules.
Therefore how are auto insurance rates determined? First, the state sometimes gets involved. Then firms toss the dice between staying competitive and making as much profit as they can for their stockholders. And finally, currently that the \'Black Box\' is here, auto insurance corporations are taking a closer look at every driver. Career, credit score, past record, even town you reside in helps \'drive\' the rates. They need even found that those who select low limits of liability are greater risks than people who select higher limits. So, by raising your liability limits, you\'ll really lower your auto insurance rate.
For a few, the new \'Black Box\' technology reduces rates by as much as 20% over those companies not using it. The bad news is, since credit scoring will play a part in ALL auto insurance rating, the more severe your credit score, the higher your auto insurance will go. No more \'discounts\', no more \'loyal client\' credits, and such like. You will be rated from head to toe, placed in a group of drivers virtually the image of you, and charged accordingly.
So watch out for insurance quotes these days becuase the insurance companies will have a lot of detail on you from this technology - there\'s no escaping the facts so no matter what you do when looking for a quote, just be honest and forthcoming and take the tips above into account when applying.