How Auto Rates are Determined Insurance companies consider several factors when setting rates. Here are some factors your insurer may consider. Year, Make, and Model of Vehicle Rates for vehicles are based on statistics compiled by the insurance industry. These statistics include information such as the frequency of theft and accident claims, the cost to repair a vehicle, the size and type of vehicle, and their safety performance and history. If you have the serial number or vehicle identification number (VIN) for your vehicle, the quote you receive will be more accurate than one based solely on year, make, and model. The VIN can indicate features such as the engine size, presence of anti-lock brakes, and whether your vehicle has four-wheel drive. Physical Address Rates vary based on where you drive. A resident of a small, remote community may be less likely to be involved in an accident than a resident of a large, urban community where there are many more miles of road and many more vehicles on the road. Stability You may be asked for information related to the length of your employment in your current job or occupation and whether you own or rent your home. While insurance companies are looking for stability, this information may also open the door to discounts based on your status as a homeowner or as a retired person. Age, Sex, and Marital Status Insurance rates are based on statistics that each company has compiled. For example, if statistics indicate that single men under the age of 25 have been found at fault in more accidents, the company will charge a higher rate for customers who fall in that category because, as a group, they will increase the need for funds to cover the expense of claims. Driving History and License Status The company will need to know how long each person has been driving, any involvement in accidents, any moving violations, any suspensions and/or revocations of license, and if there is a need for a Financial Responsibility Filing (SR22). Although the company will request a copy of your driving record if you apply for a policy, disclosing as much information as possible will make it more likely that your estimated price will match your actual price. Credit Information You may be asked to provide information regarding any bankruptcy, judgments, or credit problems. The insurance company may also ask your permission to obtain a credit report or will disclose to you that an insurance score will be used to complete the premium quote. An insurance score is a number or rating that is based in whole or in part on a consumer’s credit history. Alaska law allows insurers to consider credit information in the selection of applicants and setting of rates. Alaska Statute 21.36.460 sets limits on the types of credit information that may be used, what consideration it may be given, and how often it may be considered. Vehicle Owners and Operators in Your Household Some companies will also need the name of all members of your household who are old enough to drive. The price of your policy may be based on information on all licensed drivers as well as all potential drivers. Alaska Statute 28.20.440(l) allows you the option of excluding a driver in your household from coverage. Your insurance company may request that you do this if a driver on your policy has proven to be a greater risk than the other covered drivers. You may have a young driver away at school without a vehicle and may exclude them from coverage in an effort to lower the cost of your policy. Before excluding a driver from your policy, you may want to determine if there are less restrictive ways of removing someone from your policy. Vehicle Usage Rates may vary based on whether your vehicle is used only for pleasure, used to drive back and forth to work, or used in the course of your business. Each type of usage is defined in the policy and the terms used to describe usage may vary from company to company. Usage may also include the number of miles of your daily commute or an estimate of your annual mileage. Because terminology differs between companies, it is better to describe the use of your vehicle and allow the person providing your quote to decide which term best fits your description. Prior Insurance If you currently have an automobile insurance policy or have had a policy in the past, you will need to provide the name of the company, the dates you were insured, and the liability coverage limits you carried. Some companies may offer you a better price if you have carried liability limits higher than the minimum required limits. If you have not owned a vehicle, were not legally required to carry insurance, and have not violated the Alaska Mandatory Insurance Act, lack of prior insurance coverage may not be considered as a factor in rating your policy.