Question:
I got new auto insurance. The policies, when they arrived, were actually issued by two seperate companies. I called the agent and asked why. He said that one was from their preferred company and one from their "non-standard" company, since I have a teenage driver. He could not tell me why they actually have two seperate companies. I checked around and found out that most insurance companies have at least two seperate legal entities that they use. Geico has four! But no one can tell me why. It would seem that you could just come up with the same rate structure within one company. So now I am curious. Can anyone tell me why this is structured this way?
Answer:
OH, usually they each have DOZENS.
That's because each company can file ONE set of rates. So if you want to be able to insure teenage drivers, you have ONE set. If you want to insure DUI's, you have ANOTHER set. You aren't allowed ot have multiple sets of rates within one company. The state insurance departments don't allow it.
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