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Back in the times before computers, auto insurance was personal and subjective. The insurance agent actually written to the man he knew in the main office, called in a few favors, and got their best customers the best rates. Male drivers under 25 were charged a whole lot. Young ladies, being regarded as less risk, were charged much less.

Now, in the computer age, automobile insurance companies have large sources of accident and claims records. By number-crunching these records they can tell what type of person is more likely to be an accident risk and what type of person is more likely to be a good driver. That Black Box engineering gives them insights to the background and behavior of the folks who they believe should pay more for their car insurance. As an example, people who carry minimum limits of responsibility are actually a larger danger than those who carry at the very least 50/100 ($50,000 per person, $100,000 per accident). And statistics show that individuals with poor credit scores tend to be more likely to be involved in accidents.

In Texas, the minimum liability limit on car insurance is 20/40. Yep. $20,000 per individual, $40,000 per accident. Little could it be? And if that have been not poor enough, the minimum property damage is $15,000. Guess who accocunts for the huge difference if you're within an accident that's your fault?

Generally in most states, car insurance is regulated by the state. But that's only first. Their state uses tables of 'loss ratios', coverage, and other conjuring words, to justify what the automobile insurance companies want you to pay. Every once in some time, merely to put you down, they'll even declare a state-wide REDUCTION in car rates. Once they do, keep your wallet!

After the base rate is set by the state, the in-patient organizations negotiate with their particular rates to be adjusted by them, claiming whether better or worse loss ratio than common. Therefore, following the elections are around, the legislature allows changes, exceptions, and endorsements to jack them back around something the car insurance companies will make a huge amount of money from.

And theres more. Most states allow their own rules to be set by individual companies to find out who gets charged what. So, one auto insurance company rates a particular driver one way, while the same driver is rated by another company differently. Each company sets these underwriting rules.

So how are car insurance rates determined? First, the state usually gets involved. Then organizations throw the dice between remaining competitive and making just as much revenue as they can due to their stockholders. And finally, now that the 'Black Box' will be here, automobile insurance companies are going for a closer look at every driver. Career, credit rating, previous report, even the town your home is in helps 'push' the prices. They've even found that those who select low limits of responsibility are higher risks than higher limits are selected by those who. Therefore, by raising your liability restrictions, you might actually decrease your automobile insurance rate.

For many, the newest 'Black Box' technology reduces rates by around 20% over those businesses not utilizing it. The bad news is, since credit score does play a part in EVERY auto insurance standing, the worse your credit score, the larger your auto insurance can go. No more 'savings', no more 'loyal customer' loans, and such. You'll be scored down to your underwear, put into several owners nearly equivalent to you, and charged accordingly. personal injury attorney long beach ca discussions