The ISO, or Insurance Services Office, is the organization responsible for creating auto insurance vehicle ratings that are used by car insurance companies. Virtually every car insurance company in the country uses the ISO vehicle rating in calculating and determining auto insurance policy premium rates.
The ISO creates a publication that rates almost every car and truck made available for purchase in the United States. The publication lists auto insurance vehicle ratings and is made available to insurance agents and companies around the country. The publications are usually updated once a year.
The ISO system for calculating car insurance vehicle ratings involves rating a particular make and model vehicle on a scale between 3 and 27. The ISO uses data and information regarding car loss history, the average cost to repair or replace a certain type of vehicle and how often that particular type of vehicle is stolen in determining the vehicle’s ISO rating. Generally speaking, a vehicle that has a higher ISO rating will always be more expensive to insure that vehicles aim for a lower ISO rating.
Car insurance companies use ISO vehicle ratings in determining premiums for collision coverage and comprehensive coverage only. The reason for this is simple. Car insurance companies do not have to pay for the vehicle of the policyholder when providing liability coverage only. When providing only liability insurance company coverage, the insurance company does not use an ISO rating and depends solely on the driver’s personal credit score and driving history to determine policy rates.