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What auto insurance codes should you be aware of?

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Quick Answer

Auto insurance firms use codes, ranging from one to 27, to indicate the level of risk, and thus the size of premiums, that apply to specific vehicles, explains AutoInsurance.org. The progression from code one to code 27 signals increasingly higher premiums and levels of risk. In addition, auto insurers use company-specific codes that state agencies and organizations such as the National Association of Insurance Commissioners, or NAIC, assign to firms in the insurance industry, notes the Insurance Library Association.

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Full Answer

Auto insurance firms rely on a variety of methods to determine the types of codes that they should assign to specific vehicles, according to AutoInsurance.org. One of these methods, which involves gauging the perceived value of a conveyance, assigns sports cars and other expensive vehicles codes higher in the scale because they are more likely to be vandalized or stolen, which implies greater costs of repair or replacement.

Another method focuses on vehicle construction and assigns lower value codes, resulting in lower premiums, to conveyances that are sturdily made, continues AutoInsurance.org. This approach typically penalizes vehicles fabricated from materials, such as fiberglass, that have comparably short lifespans.

Other codes that auto insurance firms utilize include those that NAIC and state agencies assign to operators in the insurance industry, reports Safeco. For instance, the NAIC code of the Oregon Automobile Insurance Company is 23922, while that of America First Lloyd's Insurance Company is 11526. Company DMV and NAIC codes can differ; for instance, the NAIC code of the Unitrin Auto and Home Insurance Company is 16063, while its New York DMV code is 446, notes the New York Department of Financial Services.

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