Troy U Dev Site

Commercial Auto Rating Is Influenced by a Number of Factors

With so many factors playing a role in assessing the risks associated with commercial auto premiums, a customizable and versatile commercial auto rating system is a necessity.

The Insurance Services Office, or ISO, offers a number of guidelines for commercial auto insurers to follow when determining rates. These auto rating procedures are followed in order to determine the premiums that will be charged through the insurance package, and there are a number of factors that will cause the rates to vary. The variety of these factors and their inherent complexities can make commercial auto rating a somewhat daunting task, though the introduction of versatile and customizable systems has lessened the difficulty in a significant way. The factors that influence the premium include:

 

  • Territory – coverage areas are divided into territories and the risk is assessed based on each territory’s features (rural or urban, etc.)
  • Vehicle class – the size and type of the insured vehicle will influence the premiums
  • Fleet or non-fleet – fleets (usually five or more self-propelled vehicles) are usually subject to lower rates
  • Use class – classes are divided into retail, service, and commercial
  • Radius class – divided into local (within a 50 mile radius), intermediate (51-200 miles), and long distance (over 200 miles)
  • Physical damage – the age and the cost of the vehicle when new will influence the premium

 

Complexity of Factors Makes a Versatile Commercial Auto Rating System Necessary

 

With so many factors playing a role in assessing the risks associated with commercial auto premiums, a customizable and versatile commercial auto rating system is a necessity. These systems can make the process of determining a premium for insurance coverage much easier, resulting in a process that is streamlined and cost-efficient.

 

photo credit: 1968 Dodge Charger R/T | Scott Crawford cc