Progressive Says It Looks at Actual Accident Experience in Rating Crash Data
9 December 1999
Progressive Says It Looks at Actual Accident Experience in Rating Crash Data DENVER, Dec. 8 -- The Insurance Institute for Highway Safety
(IIHS) just released its latest crash tests for large family and large luxury
cars. What do these results mean for your auto insurance rates?
"Auto insurance rates are determined using many variables, including
claims experience on that particular make and model vehicle," said Jeff Adler,
Colorado General Manager, Progressive Insurance. "Because of that, we rely on
historical data -- what types of crashes has the vehicle actually been in --
rather than prospective data, or how the car will likely react in a crash."
Progressive is one of the largest auto insurers in Colorado and in the
country.
Brian O'Neill, president, Insurance Institute for Highway Safety, said,
"The results of the crash tests are obviously very important for consumers and
for vehicle manufacturers alike because as manufacturers improve their design
there will be fewer deaths and injuries. In turn, there will be fewer
insurance claims. The reality of auto insurance is that rates are based on
actual claims experience."
Variables used to determine auto insurance rates include claims
experience, vehicle make and model, driver age and place of residence. In
addition, each auto insurer uses a different combination of variables, which
explains why there is such a wide disparity, or variance, in rates available
for identical policies.
"If one insurer has significantly higher claims than another within a
given category, that company's premiums are probably going to be much higher
for drivers fitting that 'profile,'" said Adler. "Therefore, rates can vary a
lot from company to company. It really pays to shop around."
Regardless of insurer, your auto insurance premium will be based in large
part on the following factors:
- Your driving record. Drivers with multiple moving violations or
at-fault accidents are statistically more likely to file future claims. As a
result, their premium rates will be higher than those for drivers with clean
records.
- Geographic location. A vehicle operated in a large city is more likely
to be stolen or damaged than a vehicle operated in Ames, Iowa.
- Age. You might be an extremely safe 18-year-old driver. The fact
remains, however, that your peers file more claims than drivers in other age
categories. As a result, you probably will be viewed as a higher risk.
- Gender. Most auto insurers have had better claims experiences with
female drivers, according to the Insurance Institute for Highway Safety. This
is particularly true among unmarried drivers and those under 25 years of age.
- Miles driven. The more you drive, the more likely you are to have an
accident or file a damage/theft claim.
- Vehicle. The make and model of your vehicle plays a huge role in
determining your premium. A new Chevrolet Camaro can represent a
significantly greater risk -- in terms of theft, vandalism and repair costs --
than does an older, less expensive vehicle.
Obviously, there's not much you can do about your age or gender. And
marital status, home location and miles driven can be difficult to control.
That's why it pays to shop around and check rates from several insurers.
Ways to shop around:
- Contact an Independent Agent. Independent Agents represent many
different companies and can help you find the company that offers you the
right rate and services.
- Call 1-800-288-6776, a toll-free service that can provide you with
comparison rates for up to four leading insurers.
- Visit progressive.com, an Internet site that can provide you with
comparison rates for up to four leading insurers.
"Auto insurance is an extremely competitive product in today's
marketplace," Jeff Adler said. "Put this fact to work by comparing prices for
identical coverage from a number of providers. You could save hundreds of
dollars each year simply by spending 20 minutes on the telephone or shopping
through the Internet."
Progressive, in business since 1937, writes auto insurance in 48 states
and the District of Columbia and supports the work of the Insurance Institute
for Highway Safety, a nonprofit research and communications organization
wholly supported by auto insurers. For more information, go to
progressive.com or hwysafety.org.
