QuestionI am trying to pay out of pocket for a rear bumper. The cost is above $750. I believe I need to fill the SR1 Form. How will insurance use SR1 information for premiums?
AnswerI can't speak for the underwriting guidelines of all insurance companies in CA, or elsewhere for that matter, but I will say that it is likely that there is some sort of point system being applied. Similar to the way other claims databases are used, the SR1 information is likely used as a factor in rating you at the proper risk level. How much it is weighted, or even if it is counted at all, we will likely never know for sure unless we track down the person responsible for that within each insurance company. Even when we know the scale, which information and how it is used is used will vary.
In my experience, the rules and way the SR-1 is used is logical, so if you have a two or three very low payout or no payout claims where it didn't seem you were at fault or that were due to storm or animal damage, then those surely won't count as bad against you as two major payout cases where it seemed you were at fault. Without getting into a bunch of complicated math explanations, let's just say, most of the time, the rules are fair according to math.
I doubt you would see a noticeable change in your premium due to the report of one accident where there is not even going to be a payout on record. The way insurance rates are figured is very complicated and difficult to explain, but the goal is almost always to appropriately charge for risk so the company can make a profit and pay potential losses. If you have a terrible record on the books or a bunch of claims history, then you would agree that you are at a higher risk than most, just by your experiences. There are numerous and varying factors that can be used, and most rating systems are well guarded trade secrets. You can see why I can't completely answer your question, I hope.
Even if this doesn't answer your question, I hope it helps.
JP
