How is auto insurance rated?

What is your automobile insurance premium based on? It is a combination of the following:

The Drivers of the Vehicles

  • Number of drivers
  • Driving records
  • Gender, age and marital status
  • Claims history
  • Convictions or tickets
  • Driver's training


The Use of the Vehicles

  • Your location and where is the vehicle usually driven
  • Annual mileage
  • What type of driving – purely pleasure, business use, or commute to and from work
  • Distance to your work
  • Do you carry tools or supplies


The Vehicle

  • Year, make and model - specific to the vehicle identification number (VIN). There are many versions of a similar model. One could be more expensive than another.
  • Price is not the determining factor. The insurance companies use the CLEAR rating to determine the collision, comprehensive/specified perils ratings. If a vehicle is a preferred target for thieves, then the comprehensive/specified perils rating will be high. If a vehicle has had few accidents and resulting claims, then the rating would be lower.


The Insurer's Underwriting Criteria

  • Each province has different regulations. Some provinces have private insurance, and others are government-run. The insurance companies can offer excess coverage above and beyond the government issued coverage. The insuring companies can apply different rules and regulations in regards to the discounts offered, coverages available and a varying range of deductibles.
  • Whatever information is provided, the underwriter will make the decision on the rating. Be aware that credit scoring can be used to help determine your rates.


Insurance Answers
There is no one answer for your rating. An example is an at-fault accident which should amend your driving record. Yet an accident arising from a person’s operation of an emergency vehicle will not impact the driving record for a different use of vehicle that the other person may drive, such as a personal car. The at-fault accident can be used only in rating for that driver for the emergency vehicle.

An emergency vehicle would include ambulances, fire department vehicles, police vehicles while used by a person in the lawful performance of a police officer’s duties, and some other emergency response vehicles.

To get the best pricing and the most accurate quote, you should have the information available for the agent or broker. Remember, not all brokers are alike. Some have access to only a few markets, and some have many from which to shop for your insurance.

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