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All insurance companies do not have to the same rate increases at the same time.Insurance companies can do this because they use different risk assessors or variables for deciding about rate increases and when they are going to happen. This being true, it is still found that most companies typically use the same concept when factoring out rates.
If you ask an insurance agent how exactly the rates go up or why it might be hard for them to explain. This is because most insurance companies have devised their own mathematical algorithm. The company then feeds the insured's information into a computer which checks through information and spits out an answer. This algorithm itself is much too complicated for the average insurance representative to discuss.
What the computer basically does is add and subtract different factors and points to come up with a final number that matches with a value. That value points to what the rate increase or decrease should be. How is this value determined?Many insurance companies use the information or propositions found in the Insurance Services Office (ISO) manual.
Added on: Thu Oct 23, 2008 4:15 pm by :
ninatins
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