How Are Insurance Premiums Determined

The premium you pay for your car insurance policy is a reflection of how likely an insurer thinks you are to make a claim, and how expensive that claim is likely to be. It is basically a sum of factors which reflect an insurability risk. The lower the risk, the lower your premiums will be. Find out more about how are auto insurance rates calculated and get a free car insurance quote on our website.

car-insurance-1Costs are determined based on the risk of making a claim every client has. This is why drivers are typically classified as Preferred, Standard or High Risk. In order to determine the costs, the company will inquire more and assess the risk profile.

The company will be particularly interested about the car you want to insure and your driving history.  First of all, the company will ask about the exact model of the car and ownership (if you own it or still paying for it). The insurer will then use statistical data to find out how likely is for the car model to be involved in either an accident or a theft (especially when you intend buying comprehensive auto insurance). Safety ratings and recent recalls will also be researched.

Personal info of the driver, from gender, age, workplace and marital status will also influence the premiums. Very young and very old persons are more expensive to insurer, while the mature drivers, with experience behind wheels, will be more affordable to insurer.  Married persons are also deemed more responsible, and thus, cheaper to insurer when compared with their single counterparts.  Your driving history, especially the history of claims and traffic violations will determine whether you are a high risk driver or not. Try to avoid this label if you do not want to pay a lot of money.

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<a href=”″ rel=”author” title=” How Are Insurance Premiums Determined”>by Ciprian Gurgu</a>