How Your Florida Insurance Policy Is Rated

Drivers are legally required to carry auto insurance in the state of Florida in order to comply to state mandated laws. While the state minimum limits are very minimal, you will be required to maintain Bodily Injury and Property Damage coverage to operate your registered vehicle on public roadways. When you are receiving quotes from various Florida insurers, it is important to understand how your insurance policies are rated to understand the premiums you are being charges monthly, semiannually or annually. Understanding how a stable Florida automobile insurance company will rate both you, your vehicle, and your garaging location will give you the knowledge you need to understand your own personal insurance rates.

Many people do not understand why they are paying more, or less, than their family members for their auto insurance. Even if you are carrying the same coverage as your friends and family, rates can different significantly based on a number of different factors.

One significant factor in rating your insurance premium adequately is the type of vehicle you are driving. While many assume the age of a vehicle and the value of the vehicle is how rates are determined, this is entirely incorrect. Insurance premiums are rated based on a vehicles symbol that is calculated by the state’s department of insurance. A symbol, symbolizes how often the model is involved in accidents, how much damage the vehicle causes on average and how much on average the vehicle costs to repair.

In addition to rating the vehicle, a Florida automobile insurance company will also rate the vehicle’s garaging location and use. Garaging location refers to where the vehicle is regularly parked. This area will be rated based on the statistics of vehicle thefts and vandalism within the zip code. Some insureds will receive discounts if their vehicle is kept in a gated community or a home garage. The vehicle use is rated depending on if the vehicle is driven for pleasure, commute or business use. Pleasure use will cost less in comparison to commute and business use as statistics show that drivers who are driving during the course of business are more likely to be involved in an accident because of increased traffic and increased stress levels.

Obviously, a drivers driving record will be considered when rating a policy. In addition to the drivers driving record, the number of years licensed will be factored into the equation. The number of years licensed is a more accurate figure in statistics rather than age as it will prove more experienced drivers are involved in less accidents. Understanding how a Florida automobile insurance company rates you will give you a better understanding of the rates you are paying. These rating factors should explain why your rates differ from your friends and family.