WEDNESDAY, JUNE 9, 2010
Customers are often reluctant to give information to obtain quotes on insurance. Although there are certain issues that
could cause a higher rate, most of the time the agent/csr is trying to match the proper coverages, and rate program to the
customer's needs. Insurance is large groups with similar charateristics sharing losses with each other thru the insurance
company acting as intermediary. To be in the proper and/or best grouping, the customer needs to have similary charachterisits.
Example...If you were 35 years old you would not put in that you want a rate for life insurance for a 70 year old person. the rates
are a lot higher for 35 than 70. or smoker vs non smoker...even male vs female on life insurance.
Those who are married, own their own home, are older, have good driving history, and normal vehicles will pay less than those
who are single, renting, good driving history, but 2 door cars instead of 4 door sedans...etc... The single biggest factor in
auto insurance rates is "responsibility." How do insurance companies measure responsibility? A combination of many
factors. The main factor is credit. Normally a person who is more responsible won't let others drive their vehicle...Don't drive
late a night...don't drive at high rates of speed, don't cut in and out of traffic, don't hire lawyers to sue other persons, have their
on health insurance, pay their premiums on time...
An independent agent has the options of many companies and asks more questions than a direct writer or captive agent.
A better perspective is put forward to the carriers...Usually a rate that is closer to the risk...
Auto insurance is not the individual against the carrier, it is all the people together with the carrier to handle the claims of
the few who are impacted fincially from auto accidents...
How many claims are there? My experience is generally there is one claim for every five customers each year. that is
100 claims for eavery 500 customers each year ore 300 claims for each 500 customers each three years.
Claims average about 2000 for property damage and anywhere from 4000 to 12,000 on bodily injury.
500 customers average 2000 in premiums a year or 1,000,000. 3,000,000 in three years. 300 claims at about
5000 each is 1,500,000.
Claims costs and undewriting costs and company profits are the rest of the 1,500,000. And, actually one single loss
of 300,000 to 500,000 could/would wipe out the balance. In addition, the carriers have to purchase re insurance for the
This is my first blog...
Posted 4:44 PM