Sacramento, Calif. (PRWEB) November 22, 2011
California’s ongoing debate over a proposal to legally change the way insurers can hand out “continuous coverage” discounts highlights the many factors that determine how much you pay—and the importance of getting every price break you qualify for, according to Online Auto Insurance (OAI).
Under existing state law, coverage providers may offer reduced rates to drivers who have been insured for years, but only if coverage is through the same company. A proposed ballot measure would let consumers shop around for the cheapest car insurance companies have to offer while hanging on to that discount.
The change would alter part of a state law meant to protect consumers from being treated unfairly by large companies. But the continuing discussion of the matter brings to light what factors insurers may—and may not—consider when determining how much they charge individual policyholders.
Under existing Golden State law, coverage providers must set rates based on—in descending order of importance—a policyholder’s driving record, annual mileage and amount of driving experience.
But the law lists 16 other optional rating factors that companies can use to determine rates and premiums, including:
--Type of vehicle, its performance capabilities and how it is used
--Number of vehicles in the household and their characteristics
--The rated driver’s academic standing, completion of driver training and defensive driving courses
--Gender and marital status of the rated driver, as well as whether that person smokes
--Multiple policies through the same insurer
--Relative frequency and severity of claims by the policyholder
--Whether the policy is being renewed or issued for the first time
--Secondary driver characteristics
According to state government officials, the proposed “continuous coverage” change would have no significant impact on the amount of money California sees from taxes on auto premiums.
But if it were to pass, the measure could have implications for the household budgets of many Californians, with some people qualifying for more discounts and others possibly being punished for letting coverage lapse, even if they did so because they didn’t own a car.
OAI advises consumers in the Golden State and nationwide to review their auto policies in order to ensure they are receiving every price break they have coming.
To learn more about this and other coverage issues, readers can go to http://www.onlineautoinsurance.com/cheap/companies/ where they will find informative resource pages and a rate-comparison generator that can quickly evaluate their coverage options.