Please excuse the title pun, but as owner of an Albany NY Insurance agency, I often bring up the term “Tiers” as it relates to car insurance rates to both current and prospective new customers. All NY insurance companies rate premiums based on the Tier they place you on and being on a low tier can cost you hundreds to thousands of dollars over time as compared to being on a high tier.
So how exactly to you get placed on a certain tier for rating purposes? There are many factors which determine which level you ultimately end up being rated on with the more heavily rated factors as follows:
- Driving Record plays a big role. Items such as at-fault accidents and traffic violations like speeding tickets will lower your tier.
- Credit Rating – Insurers use your credit-based insurance score as a major factor in determining your premiums. A credit-based insurance score is a rating based in whole or in part on a consumer’s credit information. Credit-based insurance scores use certain elements of a person’s credit history to predict how likely they are to have an insurance loss. Many people don’t realize just how significantly a credit score can impact insurance prices.
- Age – In general, mature drivers have fewer accidents than less experienced drivers, particularly teenage drivers and drivers under 25 years old. Rates for young drivers are significantly higher than that of a mature driver. Those of you who have had your teenage child added to your auto policy can attest to the sticker shock. Some insurance industry pundits state that the optimal rating age is between 30 and 65 years of age.
- Prior Liability Limits- Those who maintain high Bodily Injury Liability limits on their policy will increase their tier rating as opposed to those that carry low limits or the NYS required minimum of $25,000 per person/ $50 per accident coverage.
Keep in mind that these are not the only tier-rating factors but the major players in determining where you are placed and how your base rates are determined. Also important to note is that different insurers place a different level of importance on any particular tier rating factor. For instance, Insurance Company A may place a heavy emphasis on driving records as opposed to Company B. But Company B may place a higher weight on the insured’s credit rating.
For this reason, it’s important to check with an independent agency for your NY car insurance quotes if you are aiming for the best deal. An independent agency has access to multiple carriers which normally translates to the best options for consumers.
You may have gotten your auto insurance policy a couple years ago or even longer when your tier rating factors were not as good as they are now. Maybe some accidents have dropped off your driving record, your credit rating has increased or you are now in the ideal age range for rating purposes, or a combination of all. If that’s the case, it may be prime time to get a new NY auto insurance quote to see where you stand.
If you now rate on a higher tier, you may be surprised at how much you save on your car insurance. In fact, it may bring you to “Tears”.
If you would like to see where you stand and if you are in line to save a lot of money on your policy feel free to call us here at the NY Insurance Hub anytime for a car insurance quote. We’re glad to help.