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All auto losses are used to determine premiums. All claims paid plus expenses of the company are added up to determine if the insurance company has a profit or a loss. Auto insurance companies usually try to break even on underwriting of auto insurance policies. If they can break even on the insurance then they will usually make money on investing the premiums and be profitable for the year.

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Q: What percentage of auto insurance losses are used to determine premium?
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What percentage of a typical auto insurance premium dollar is used to pay losses?


Just what exactly is auto insurance?

Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.

How do insurance companies make money?

You pay a premium and they agree to cover your losses, but it's more complicated how they make money. They get paid when you don't have an accident or have a loss that needs to be covered because your premium covers it.

Do car insurance premiums increase from vandalism?

typcially NO insurance carriers will not allow a rate increase for 'comprehensive' losses of which vandalism is.......however, if there is a pattern or many many of the same type of comp loss, such as several vandalism claims they may........ All losses are considered when calculating premium rates and risk factors. Losses where you are not at fault are generally less of a factor but may still have an effect on your premium. As an example We had a customer a few years ago who had 4 losses in the preceding 14 months. None of which was he considered at fault. The insurer did not increase his premium but they did decline to renew his policy for another year.

What percentage of a typical homeowners insurance premium dollar is used to pay losses?

This changes from company to company and year to year. For the past few years it has been over 100% for most companies. State Farm has been loosing billions each year for the past several years. Insurance companies often loose money on claims and hope to make up for some or all of it by investing the premiums.

How Surety can be compared to insurance policy?

Both insurance and surety provide protection against financial loss. Insurance anticipates losses and charges a premium with that in mind where surety companies expect no loss and the premium charged is a 'service fee'. Surety bonds involve three-parties the surety company, principal and obligee. Insurance involves two-parties the insurance company and the insured. With insurance the risk is transferred to the insurance company where as with surety the risk remains with the principal. The surety is providing a guarantee against loss by agreeing to be responsible for the obligation of the principal.

What is a perils?

Perils are types of losses. All losses(perils) covered by an insurance company will be in your insurance booklet that they mail to you.

What was the standings in the National League on September 2 2005?

EAST DIVISION Atlanta Braves 77 wins 58 losses .570 percentage Philadelphia Phillies 73 wins 62 losses .541 percentage Florida Marlins 71 wins 63 losses .530 percentage New York Mets 69 wins 65 losses .515 percentage Washington Nationals 69 wins 66 losses .511 percentage CENTRAL DIVISION St Louis Cardinals 85 wins 50 losses .630 percentage Houston Astros 72 wins 62 losses .537 percentage Milwaukee Brewers 66 wins 69 losses .489 percentage Chicago Cubs 64 wins 70 losses .478 percentage Cincinnati Reds 62 wins 72 losses .463 percentage Pittsburgh Pirates 55 wins 79 losses .410 percentage WEST DIVISION San Diego Padres 67 wins 67 losses .500 percentage Los Angeles Dodgers 61 wins 73 losses .455 percentage San Francisco Giants 60 wins 73 losses .451 percentage Arizona Diamondbacks 61 wins 75 losses .449 percentage Colorado Rockies 53 wins 81 losses .396 percentage

What is Covered peril?

Perils are types of losses. All losses(perils) covered by an insurance company will be in your insurance booklet that they mail to you.

What are the disadvantages of excess of loss reinsurance?

1. It is limited and you have to declare how many free reinstatements you buy. For example when reinsuring property line you can buy coverage of USD 99.000.000 in excess of USD 1.000.000 with one free reinstatement. If three losses of USD 100.000.000 happen during a year only first two are covered if you do not buy additional coverage. Also after two losses that exhaust your excess of loss capacity buying the third reinstatement would be extremely expensive. 2. You have to pay so called MinDep - minimum deposit premium. It is calculated as a certain percentage of estimated premium income multipled by the rate. If your actual premium income is lower than this percentage of declared premium income you pay for empty coverage - the one you do not actually need. 3. Excess of loss only covers losses excessing some amount while proportionate reinsurance (quota share, surplus) covers certain share of every, even the smallest one, indemnity paid from the insurance that falls into the treaty.

If your car is stolen at the mall can your insurance company raise your rates?

Yes, All losses incurred are used to properly evaluate your risk. If you frequent places where vehicles are stolen or even if you live in an area with high accident or vehicle theft rates then this obviously effects you insurance premium.

What is a covered peril?

Perils are types of losses. All losses(perils) covered by an insurance company will be in your insurance booklet that they mail to you.