- Category: Oregon Commercial Auto Insurance Pricing
- Published: Thursday, 16 February 2012 10:56
- Written by Doug Hartley
- Hits: 3229
Have you ever wondered why insurance costs so much? Have you ever gotten quotes from many different companies all in one day only to discover how wildly the prices differ? Are you insurance savy enough to know the differences in limits and coverages to make an informed decision about business auto insurance pricing? What are the factors used in determining the cost of auto insurance in Oregon? All good questions.
Here is a summary of some of the rating factors used to determine the price of insurance. Some may seem discriminatory in nature. That may be true. Insurance laws in Oregon allow for "fair discrimination". Or, in other words, a certain class of individual may present a higher risk of accident and the company can charge a higher rate for driver that presents such a higher risk.
Age. Younger age translates to less experience. The primary reason why a driver in his teenage years is statistically more likely to get into an accident simply has to do with lack of driving experience. Some say it's hormones. Some say it's peer pressure. Yes, those are contributing factors. But, with experience, a driver learns to overcome some of those secondary factors and learns how to judge road conditions, traffic patterns and potential hazards in the road. Reaction time in young drivers to adult drivers is usually good. Vision, corrected or not is usually good. The major increase in risk for drivers of advanced age is reaction time. Most elderly drivers have years of experience and have performed magnificently in tough driving situations over the years. However, advanced age lowers reaction time and may lead to vision difficulties. So, business auto insurance companies apply rating or pricing factors on the cost of insurance based on a drivers age.
Gender. There has always been a standing joke among men that women are not as fair a driver. Statistics prove otherwise. Female drivers statistically are better drivers in the younger years especially. During adult and advanced age years, the statistics are about the same. So, auto insurance companies usually charge more for youthful male operators than their female counterparts in the State of Oregon.
Driving record. This one seems obvious to most. But, ask the guy who has gotten lots of fix-it or "paper" tickets. He's a good driver. Has had no moving violations nor accidents. He gets charged a higher rate because the insurance company feels that irresponsibility in caring for documentation or the safety of a vehicle may lead to irresponsibility in driving habits. Each additional moving violation or an accident a driver gets increases the probability that he will be in another accident causing the commercial auto insurance company to have to pay another claim. Insurance companies don't like to have to pay out claims. That's why they will raise your premium or even cancel you if you get too many incidents.
Credit record. Yep! Credit. Almost all insurance companies in Oregon now check your credit when pricing your insurance. So, be careful. Please understand this very important fact. Every time you ask for a quote, the insurance company is running your credit. If you are going through a broker or agent, each company is checking your credit that he uses or gets a bid from. So, if you call around for insurance quotes and talk to ten different agents or companies, you may be having your credit checked as many as a hundred times! Just having your credit checked once places an "inquiry" on your credit report. The number of inquiries a person has can actually do his credit report harm. The insurance companies say that they have conclusive statistical proof that there is a correlation between someone with bad credit is more likely to be involved in an accident or file a claim. Yep! That's what they say. Oregonians had an opportunity to vote against the use of credit in 2004. Oregonians voted NO! A no vote meant that it was okay for insurance companies to continue to use credit as a basis for determining eligibility for insurance first of all and then use it to determine the price. A "yes" vote would have prevented the insurance companies from being able to use credit. Does that make sense? Until someone submits another proposition to ban or limit the use, the credit scoring for insurance rates stands. Talk to us. We'll be happy to explain how you can more effectively get quotes and pricing that doesn't "ding" your credit. Shop once! Buy once! Keep it local!
Zip code. Yes. The zip code where you live does matter. It doesn't have anything to do with whether you live in a rich area or poor area. There have been television shows that distinguish a wealthy area based on just the zip code. The zip codes in Oregon are broad enough that most likely there is a good cross section of incomes in each. No. Zip code has to do more with the statistical analysis of how many accidents occur in each one in a given period of time. Obviously, this is a function of traffic patterns, congestion and traffic management through signs and stop lights. It also has to do with population. If you live in a town of, say, 10,000, you are less likely to get into an accident than someone who lives in downtown Portland.
Marital status. Married people are less likely, statistically, to have a loss or be in an accident. Why? Maybe because the married person is more likely to go home every night rather than be hanging out in bars and clubs or with friends. Maybe the driver feels more responsible for his or her own personal safety so as to be able to continue to provide for the family. Who knows! Admittedly, there are a lot of good, safe driving, single people out there. Were just talking stats here.
Type of car. Four wheel drive vehicles get charged more than two wheel drive. Why? Perhaps because the driver is more likely to take them off-road or drive less cautiously in bad weather or on poor road conditions. Higher priced cars cost more to repair. Bigger cars and SUVs can cause more damage than a smaller car. Passengers and drivers of two door cars lack the little post that separates the doors of the four-door car that gives added protection in a broadside accident. People are more likely to get injured in a smaller car so medical bills might be higher. Cars with lots of plastic or fiberglass might be more expensive to insure because you can't "pound out" the dents in plastic. High performance or sports cars might cost more to insure as they may cause more damage due to potential velocities they may reach not to mention the injury the occupants may sustain in accidents at high speeds.
Call us today if you have any questions about the factors that commercial auto insurance companies use in Oregon to determine the price of your policy. 503-489-3143 in Gresham, Oregon and 503-693-2852 in Hillsboro, Oregon.