Every state has an insurance commission and there is significant regulation. Insurance companies must file and receive approval for exactly how they will rate a policy and determine a price.
Depending on the line of business and state, the amount of flexibility the carrier has to adjust price varies. I’m less familiar with the Auto line and what the levers to adjust price are. Both filed levers (X is rate 1, Y is rate 2) and variable levers (Z can be between 0.5 and 2.5 at the carriers discretion). Where all those levers are combined to produce a rate. Beyond that, carriers have their own underwriting standards that they may use to exclude risks, especially if there’s no way to adjust the price to account for a higher risk.
This is one reason insurance companies are usually holding companies that own a bunch of rating companies. Each rating company can file different rates with the state and they can quote your policy on a specific one based on the risk conditions. That’s one way to adjust rates that aren’t adjustable.
Personal Auto and Commercial Auto would be filed independently and with different conditions. Commercial generally more flexible for the carrier.
I wonder what they did to offset the risk some product manager clearly wanted to get rid of originally.
