Letter: Profit margins determine auto insurance rates

Monday, Dec. 1, 2003 | 9:02 a.m.

Recently my auto insurance premium took a big jump so I started shopping around. Much to my surprise, I found the disparity in price with certain well-known companies to be in some cases as much as 88 percent higher than what I was paying, for the same coverage.

I was also surprised to learn that good or bad credit, or age, had to do with premium cost. They told me that if you live in certain areas of Las Vegas that that could make a difference in your cost. They all agreed that your driving record was the main criteria for premium changes, including how far you drive to and from work and how many miles a year you put on your car. Some companies charge you more if you drive more than 7,000 miles a year and others give you up to 12,000 miles before a surcharge is imposed.

They also say that nonsmokers get a better rate. Of course, if you are driving what they consider to be a sports car, up goes the premium again. You can drive a Nissan sedan with 350 horsepower or a Ford Focus with four cylinders, and guess which one they will consider a sports car.

Fact is, none of the above is really the reason for them to change your premium, excepting DUIs and moving violations. They charge according to their recent profit experience and use the above as mere excuses. Shop around, see for yourself.

SHEL BERLATSKY

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