Topic:
AUTOMOBILE INSURANCE;
Location:
INSURANCE - MOTOR VEHICLE;

OLR Research Report


September 1, 2004

 

2004-R-0712

RATE FACTORS FOR AUTOMOBILE INSURANCE

By: Janet L. Kaminski, Associate Legislative Attorney

You asked for the factors used by insurance companies to develop automobile insurance rates.

There is no law or regulation that specifies what factors insurance companies must consider when setting automobile insurance rates. In practice, insurance companies use factors such as: (1) age, (2) gender, (3) marital status, (4) motor vehicle driving record, (5) type of vehicle, (6) miles to be driven, (7) principal place of garaging the vehicle, and (8) credit history.

By law, premium discounts may be available for completing courses in (1) driver training, (2) motorcycle training, and (3) senior citizen accident prevention (CGS 38a-682, 685, and 683, respectively). Insurance companies may offer other discounts (e.g., good student).

Connecticut law prohibits rates that are excessive, inadequate, or unfairly discriminatory. It permits insurers to group risks by classification, measuring differences in risks that can be demonstrated to have a probable effect upon losses or expenses (CGS 38a-686).

The Connecticut Insurance Department monitors auto insurance rates by reviewing rate filings that insurance companies are required to submit (CGS 38a-688).

JK:ts