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Old 11-04-2004, 11:05 PM
jksoft jksoft is offline
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Join Date: Sep 2004
Posts: 37
I am not completely familiar with Texas insurance laws, but I am with Florida. Rating symbols take many factors into account. Some of those factors are:
- MSRP of vehicle
- current value of vehicle
- statistical evidence from claims
The last one, statistical evidence, is what a whole team of actuaries get paid to calculate. Florida's symbols aren't mandated by the state so each insurance company looks at vast amounts of claims history data and if there have been an unusual number of claims for a particular vehicle, regardless of its value, that vehicle will get a higher symbol. I work with this stuff everyday and I can see how from the outside it might not make sense. Sometimes the data doesn't make complete sense, but it is often times taken at face value.

J

Quote:
Originally Posted by jcyuhn
In Texas the cost to insure an automobile is determined by its rating symbo. The rating symbo is assigned by the state insurance commission. Each insurer determines their exact charge independently, but the rating symbol system means you'll see pretty much the same relationship in the rates for each of your cars from one insurer to another.

My agent (Nationwide) has confirmed the rating symbols frequently don't make a lot of sense. Here's an example. My spouse drives a very pristine 1993 300E sedan. On a good day it's probably worth $10K, but that might be a stretch. It's rating symbol is 22. That translates to $327.50/6 months. I drive a 2001 E320 wagon worth $30K+. It's rating symbol is 18, so I pay $296.50/6 months for the exact same coverage.

Strange, huh? The only thing I can figure is that wagons are ridiculously cheap to insure compared to sedans. My recently sold 1987 diesel wagon had a rating symbol of 16 - it was way cheap to insure. The 1993 sedan replaced an unreliable 1998 E300 turbodiesel about 18 months ago - both were about the same price to insure. That was a surpise, given that we bought the 1993 car with less than half the proceeds from selling the 1998.

- JimY
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