The existence of insurance premiums is a complex place. Identical coverage for the same individual can vary greatly. What causes these variations? Back in 2003 two authors at the University of California,researched this precise question. With the assistance of the Lewis Center for Regional Policy Studies, they were able to pinpoint many interesting causes. The wide story can be found at http://www.uctc.net/papers/654.
df . This paper explains many reasons for California car insurance cost differences.
Geographic area seems to be a huge factor in car insurance rate variations. Inner cities throw the highest accident and crime incidences and later the highest costs for insurance. People living in suburban and rural areas may have insurance costs hundreds of dollars lower than urban dwellers. Geographic regions can be rent by zip codes or area codes. To get out which your California car insurance company utilizes, give them a call.
Income range is likewise a major component in rate quotes. There are higher incidences of late payments and non-payments in the lower income range. Insurance companies try to start the missed payments by charging higher rates among these individuals. Some states have taken steps to try and facilitate this borderline discriminatory practice.
The two factors, geographic area and income range, target poor inner city non-whites the most. This has led around to try and determine what basis premiums are set by. Voters have approved propositions to limit insurance determination factors to age, record, and years driving, but courts continue to overthrow them. To see it remains controversial and California car insurance companies continue to be allowed to use zip codes as premium determinations.
In the insurance company`s defense, insurance is a business. They should be allowed to recover their costs in higher risk areas. If they paid more out than they brought in, the society would go out of business. It doesn`t appear that they are targeting minorities on purpose, it only happens that the bulk of residents in a targeted area fall into certain ethnic categories.
California car insurance companies use many determinations in car insurance rate quotes. Saving money on your policy may be as bare as moving out of the city into a suburban or rural area. Searching for and landing a better paying job may also keep you a few hundred dollars. If this is not possible or you wish your current employer, job longevity will also help get your rates down.
To determine the rate variations in your area among California car insurance providers go to http://www.carinsuranceguy.info/ and use for a few free car insurance rate quotes in different zip codes.
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