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The following information outlines Texas' rating system, offers money-saving tips and describes how your driving record affects your premium.

How are auto insurance rates determined?
Texas encourages competition to keep car insurance rates in line. Most insurance companies set their own rates, within a range of 30 percent above and below Texas benchmark rates issued each year by the Commissioner of Insurance.

Two dozen companies called county mutuals are an exception. They set their own rates, without limitations. Most county mutuals specialize in high-risk drivers and generally charge more than other companies. Check your policy's Declarations page for the words county mutual. If you and your covered family members have good driving records, you probably don't belong in a county mutual and should shop for coverage with a standard or preferred company that offers lower rates.

What are standard and preferred companies?
A preferred company offers the lowest rates.

A standard company's rates are somewhat higher than a preferred company's.

A high-risk company sells at high rates to drivers with poor driving records or other problems. In Texas, a high-risk company is likely to be a county mutual.

Many insurers actually are groups of companies. An insurance group might consist of a preferred company, a standard company and a county mutual.

What factors affect my individual premium?
When a company applies its rates to your particular situation as a driver, the resulting total is your premium. Several factors determine the premium you are quoted or charged:

1. Your age and, for younger drivers, your marital status. Unmarried male drivers under 21 pay the highest rates. Also paying higher rates are single men between 21 and 25 and unmarried women under 21. On the other hand, drivers over 50 may get discounts from some companies.

2. The county where you keep your auto. Texas is divided into 52 rating territories. Because they have more accidents and auto thefts, urban counties have higher rates than rural areas.

3. Your auto. Collision and comprehensive rates are highest for luxury cars, high-performance cars and sports cars. Rates also reflect the fact that some cars damage more easily or cost more to repair than others. On older, paid-for, lower-value cars, you should consider dropping collision insurance. An insurer will not pay for repairs that cost more than the car's value. When repair costs exceed the car's market value, the insurer will total the car and send you a check for its market value.

4. How you use your auto. Rates are higher for autos driven to work or used in business than for cars used only for errands and pleasure trips.

5. Your deductibles, if you have collision and comprehensive. Deductibles are your out-of-pocket share of the cost of a claim. You can reduce your premium by raising your deductibles.

6. Surcharges. Dollar penalties are added for accidents and certain traffic violations.

7. Discounts. Some are required by the state, others are optional with companies. Ask your agent. County mutuals, however, are not required to give any discounts.

How can I check out a company or agent?
A low rate is no bargain if you buy from a fraudulent company or agent. To find information on auto insurance companies in Texas, call the Texas Department of Insurance (TDI) at:

1-800-252-3439
in Austin, (512)463-6515.

The texas department of insurance can tell you whether an agent or company is authorized to sell auto insurance in Texas. They can also tell you a company's complaint record and its letter grade from a national financial rating service.

How does my driving record affect my premium?
1. A good driving record can save you money. Preferred companies, which charge the lowest rates, accept only applicants with good driving records.

2. A good driving record can get you a discount from some companies when you renew your policy. Ask your agent.>br> 3. Tickets and accidents can mean higher premiums if companies classify you as "high-risk." You could end up in a county mutual or the Texas Automobile Insurance Plan Association (TAIPA), also known as the assigned risk plan. TAIPA provides basic liability coverages for drivers rejected by at least two insurance companies. Motorists in the TAIPA pay higher surcharges and higher rates than other drivers, but sometimes less than drivers insured by county mutuals. 4. Accidents or major driving offenses can add surcharges to your premium. Surcharges are mandatory and stay on your premium for three years.

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