Can someone explain how auto insurance rates work?

Can't argue with that about premiums and company REPUTATION. But the days of your insurance policy being underwritten by a local company that cares in the least about you as an individual are long gone.

I think what you mean is your agent... and while that's true even then you may have a good relationship but unless they are really careful they are just as likely to get you in trouble as help you save money. In the aftermath of hurricane Sandy more than a few people around here are cussing out their agents who helped them save bucks on premiums cause they find now they don't have sufficient disaster coverage limits.

People also don't realize they can hire an adjuster and fight the insurance co's. assessment of damages. That, along with reading your policy and asking pointed questions to understand coverage limits pretty much negates the effect of being close personal friends with your agent. So you're still left with the company's rep. being really important in the deal.

Oh, and having the right coverages: not too much is as important as not too little.

 

As a young driver, your choices may be limited to independent agents until you reach a certain age (I had to wait until I was 25).

Like Buddy said, you need to find an agent that you feel you can trust and is looking out for your interests. Insurance companies have rules, and different states have different laws, and the agents should know how to navigate them to help you when you need it.

I've been with State Farm for 21 years now and have had a few auto claims that worked out well. We loved our agent back in TX -- he went to the boat showroom and got pictures of our boat before we even bought it, I had just asked him what boat insurance would cost. When we moved to MO, we transferred our policies to a local agent assuming that he would be as helpful. He was not, so we called another one who actually helped us, so we moved our policies over to him.

Price is one thing, but peace of mind and a good agent relationship are worth something. After 21 years, though, nobody else can touch our rates, and we've never had to argue with our company or hire our own adjuster.

 

yes, i think i meant to say "agent", thanks

...don't forget the responsibility of folks to actually ask their agents pertinent questions about coverage, including flood ins. my agent is always great about explaning things to me on the phone, answering my questions... if folks took the time to actually READ their policies (how many do that?), and learn that flood ins. (due to "rising waters") is handled by the fed gov't, not your ins. company... if you live near a coastal area or flood prone area, it would be wise to get the federal flood ins...