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Have you ever wondered how rates for auto insurance are calculated?  I’m going to share some of the factors that are taken into consideration.

1.      Driving experience:  The more years you have the more beneficial it will be to receiving a good rate.  In NC, a driver is considered inexperienced if they have under 3 years documented driving experience in the USA, Puerto Rico, and Canada.  Inexperienced drivers can expect a much higher rate than those considered, “experienced”.  How much more?  It just depends on the insurance carrier.  Some insurance companies will make the rate for an inexperienced driver VERY unattractive, which basically means that is not the type of business they are after.


2.      Driving record:  Accidents and violations will affect the rate for insurance.  There are some companies that specifically target drivers with a less than perfect record and will offer excellent rates even with insurance points. 


·       Did you know that even a not at fault accident or claim can affect your rates?  You won’t receive any insurance points, but it can remove discounts for incidents.


3.      Vehicle Type:  The year/make/model will affect the rate, as well the Price Group Symbol (PGS), which is developed by the Insurance Services Office.  The higher the PGS the higher the rate.  How is the PGS determined?  Type of vehicle, performance/power, cost of repairs, vehicle theft history, are some of the main factors.  Ex. New Ford Mustang GT has a higher PGS than a new minivan.


4.      Territory:  Where is the vehicle garaged?  There are multiple territories in the state and they can all have differing rates.  There are also different rates for areas within a county.



5.      Previous Insurance:  Have you had a lapse in coverage or have you had continuous insurance without a lapse for many years?  Those that have had continuous insurance without a lapse will find that they have more favorable rates given than those that have had a lapse.

*What if you sold your vehicle and don’t need insurance?  Does that count?  Yes, not continuing to carry insurance counts.  The requirement of obtaining a license in NC is that you provide proof of insurance and maintain insurance.  This can still be done even if you don’t own a vehicle through a non-owner’s policy.  There are requirements that must be met to qualify for a non-owner’s policy. 


6.      Insurance Score:  An insurance score is a reflection of one’s credit.  Good credit usually means a better insurance score.  Lower credit usually means a worse insurance score.  Those with better insurance scores have access to more favorable rates.  This only applies to individuals that need physical damage (collision and comprehensive) on their auto policy.



7.      Level of Coverage:  The higher the level of liability coverage, the higher the cost of the insurance, but if you have a clean driving record the difference in cost is usually minimal.


8.      Deductibles:  The lower the deductible the higher the rate.  The higher the deductible the lower the rate.  If you assume more risk by choosing a higher deductible you can expect to pay less for your insurance.


9.      Discounts:  Multi-car, multi-policy, safe driver, pay in full, bank draft and good student.  These are some of the discounts available to consumers on their auto insurance policy.  These aren’t all the discount available as they can differ from carrier to carrier, but they are some of the more common ones.  Not much more to say about these, as they are self-explanatory.

Hope this is helpful information to everyone.  If there are any other questions about this or insurance in general, please give me a call at 919-917-7048 or send an email to

Jeff Weaver

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