A middle-aged, married couple living in the District of Columbia owns a 1983 Olds Cutlass, has a clean driving record and is in the market for automobile insurance. An easy choice, they think: All companies must charge pretty much the same rate.

They're wrong.

If they go to Travelers Group, they can buy a package of liability, personal injury, and collision coverage for a $504 annual premium. If the two seek insurance from Liberty Mutual, the very same coverage would cost $699. At Fireman's Fund Group, this couple would be charged $865.

For families and individuals of all types in the Washington area, wide variations in the cost of auto insurance -- in some cases, by as much as $800 a year -- are not unusual, according to a recent survey of 32 companies carried out by Washington Consumers' Checkbook.

Shopping around for a new insurance company, the survey shows, might save a consumer hundreds of dollars in annual premiums. See related chart, page 4.

"It is very confusing," admitted one area insurance agent, when told of the survey results. "For exactly the same kind of risk characteristics, I have a hard time understanding that kind of spread."

But to others in the insurance business, the variations in price make sense. They cite a number of reasons, including differences between companies in the commissions they pay to agents; quality of service; loss experience and underwriting standards.

On top of this, officials say, price competition is restrained by the current tight market for automobile insurance. Premiums have been rising by as much as 20 percent in the past year as companies say they are scrambling to make up for heavy losses recently in car insurance.

"I don't think anyone is cutting their price to put on business," said Andy Kudera, an actuary with United States Fidelity & Guaranty Group in Baltimore. "It is really such a tight market right now; so competition is not that much of a factor."

Checkbook researchers examined six representative categories of drivers, seeking quotes from 32 companies on what they charge for each category in four area jurisdictions.

The researchers examined only prices for "preferred" drivers, that is, those with clean driving records who get the best rates from companies. Premiums are more expensive for those with accidents or traffic violations on their records.

Within categories of sample policyholders, the survey found wide differences. For instance, coverage for a College Park family of three with a clean driving record ranged in price from as little as $563 to to more than $1400, according to the survey. The researchers found that the average difference between the highest quote and the lowest for each of the 24 sample policyholders was $668.

The first explanation cited by industry officials for this "spread" was the differing cost of insurance agents. Some companies, like Geico or State Farm, use their own agents to sell policies. That generally means lower costs than paying a commission to an independent agent, as other companies do.

Agents said their commissions generally amount to about 10 to 15 percent of the premium, although Bob Hunter of the National Insurance Consumer Organization said that some companies are paying even larger commissions as a means of building up market share in some areas.

"The competition gets reversed," quipped Hunter. "It is not a competitive market for the consumer but for the agent."

A related factor is the purported difference in quality of service, such as how efficiently a company handles claims or changes in coverage.

One insurance official, who asked not to be named, said, "You have some companies that will sell you a cheap policy, and you'll spend the rest of your life trying to get your claim paid."

"On the other hand, you'll have other companies who charge a high price, but they'll pay your claim right away," he added. But low price doesn't necessarily mean poor service. The Checkbook researchers found that some of the companies cited by consumers for good service also offered consistently low prices, including the Erie Insurance Exchange and United Services Automobile Association.

A third explanation offered by agents and insurers for the differing prices is differing claims experience. In setting prices, companies take into account both their past claims experience with a particular kind of risk and what they anticipate their future risk to be. But these calculations can be quite different for two companies, especially because some companies do a better job of weeding out poor risks, industry officials say.

"Loss experience for one carrier can be 100 percent different than another carrier for the same premium volume," said Will Bernardin, president of Perpetual Insurance Inc., an insurance agency in Landover.

Bernardin said that companies will make different calculations about the effect of an external change on their expected losses. An example is the District's recent decision to scrap no-fault auto insurance.

"One carrier may look at that and say, 'My God, our rates should double to handle that,' and another company could decide to drop rates 30 percent," Bernardin said.

A final factor in the pricing equation is the level of competition among carriers. Insurers insist that competition is very keen, in some cases forcing them to keep down rates more than they would like. But they also acknowledge that the recent losses in auto lines allow them to be choosy about the risks they are willing to take.

"You'll often see a carrier raise its rates because it can't stand doing business in that line," said Bernardin. In this kind of tight market, some agents recommend against leaving a longtime carrier unless you have a very good driving record. "If you have any strikes against you, it is best to stay where you are," said Michelle Smithheart, an agent in Falls Church, who said companies are turning away many applicants who have had even one accident.

Agents also say that it can pay to stick with a company you've been with for a long time, because it is more inclined to stick by you if you have an accident.

But industry experts acknowledge that loyalty can only count for so much, especially with possible savings of as much as several hundred dollars from switching insurers.

"One of the reasons insurance is not as competitive as refrigerators is that people are afraid to leave their insurers," said Hunter, the consumer advocate.

"Some of the companies are really price gouging in my estimation. Now is a really good time to shop around."