Posted On: July 20, 2007, 1:57 pm CDT

Posted By: chuck baker

HELP ME PLEASE !!!

I need help with how to explain our rate determination methodology to my customers here in Arkansas.

Upon renewal, even though the majority are receiving our 30/60, ultra preferred, and super preferred discounts for safe driving and no accidents, citations or claims in the past 3 to 5 years their premiums are increasing by from 10% to 45%.

Nearly all of my customers foolishly believe that auto premiums are determined primarily by their driving record and partially by the type vehicle they drive.

I am aware that according to the "studies" people with what Insurance Companies have determined to be bad "Insurance Scores" are much more likely to file claims than those with "good" credit scores. Now, looking at my second paragraph above the facts do not appear to support the "studies". Additionally, from what we are allowed to see of the reasons for some the negatives in the risk assessment process I don't believe that some of the negatives are valid in the real world but some appear to be very valid. I have customers we show as having a very bad score making them an insurance risk yet they are to lending institutions acceptable customers. Who has the most risk?????

Anyway, the bottom line is look at the second paragraph. Those are the people I need to be able to provide some logical explanation to for their rate increase because of their propensity to file claims when they have not filed claims in the past 3 to 5 years.