Phoenix, Ariz. (WiredPRNews.com) — The Arizona Department of Insurance (DOI) advises consumers that “The only way you can make certain that you are not paying too much for your auto insurance is to shop around. Prices for the same coverage may cost two or three times as much with one company as another.” And the process of shopping around for car insurance today has become quite easy. No longer do Arizonans have to make time-consuming rounds to local agents. Residents of the Grand Canyon State now are afforded the ease of getting personalized premium estimates from a number of carriers at once with the help of online quote generators like OnlineAutoInsurance.com. But some Arizonans may still be wondering how their rates, in the end, are determined.
Like in any other state, individual Arizona car insurance rates are determined through the use of a number of factors. The most commonly used of those factors, according to the DOI, are loss history and credit history.
A driver’s loss history, as the name implies, indicates how many claims he or she has filed in the past. Insurers can access this data through something called the Comprehensive Loss Underwriting Exchange (CLUE), which contains up to seven years of personal property claims history.
While it makes sense that a person’s claims history would provide valuable information pertinent to the frequency with which a motorist may file claims in the future, credit history may seem like a more arbitrary factor. But credit information actually has proven to be very useful to insurers, a fact that is evidenced by its frequent use across the country. In fact, a report to Congress by the Federal Trade Commission, produced in 2007, emphasized the usefulness of using credit information to determine insurance rates, although the study was inconclusive as to the reason why it proves to be so useful. “Credit-based insurance scores are effective predictors of risk under automobile policies,” the study’s authors wrote. “They are predictive of the number of claims consumers file and the total cost of those claims.”
Prospective auto insurance buyers without a credit history can be assured, though, that the state department prohibits insurers from using a person’s lack of a credit history against them in determining rates.
To read more about the factors that can affect Arizona coverage rates, consumers can go to http://www.onlineautoinsurance.com/arizona/, where visitors can also begin their shopping process by getting a free and obligation-free quote comparison.