The variables that insurers use to calculate the price of a policy are, for the most part, deemed fair by customers, but they are struggling with rising costs, a recent survey said.
Most Americans agree that U.S. insurers use a fair procedure to determine the price of personal auto and homeowners policies. Still, nearly half of them struggle to pay for coverage, a recent Insurance Research Council survey said. Insurers use rating variables to calculate the risk of losses. Consumers generally agreed that the variables insurers used to determine home and car insurance pricing were fair, according to the survey.
Eighty-five percent of respondents said that pricing policies based on a driver's previous traffic violations were fair the survey said. While 76% said that using their claims-filing history and 75% said using information derived from telematics devices was a legitimate way to determine policy pricing. Telematics programs use connected devices, smartphones, or an auto manufacturer mobile app to monitor and report details about driving habits and can potentially lower rates.
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