How your car insurance rate is calculated
If you are curious about how your auto insurance rate is calculated, you are not alone. At Auto Insurance Las Vegas, this question comes up more than you know. The insurance industry is all about taking calculated risks. Auto insurance companies typically base their rates on the likelihood of your filing a claim at some point in the future. They use various factors to make this determination. There is no one to know for certain, the exact formula that an insurance company will use to calculate risk and come up with a rate. However, it will help to at least know about the various factors they consider to come up with your rate. After considering these factors, you will see how lifestyle changes you make will impact your insurance premiums.
Let’s start with your driving history. Are you a person with a lot of traffic violations on your record? If you are then you would likely be considered a high-risk driver. If you have a lot of accidents or have had a lot in the past, they may not see you as a favorable candidate to offer insurance to. You may cost them too much. However, here are some of the other things they may consider before coming to a final decision, as to whether they should offer you a policy or not. These may include, accidents that weren’t your fault, moving violations that you received a ticket for, and whether your license was ever revoked or suspended. Since your driving history is a big factor in how much you will be charged, you could have the same policy as someon else but since you are high-risk, your policy may cost more.
The insurance companies also consider specific demographic factors, such as the fact that drivers under 25 and those older than 65 years old, have proven to be involved in more accidents and are usually paying higher premium rates. They will also consider if you are male or female because males tend to get into more accidents and are charged more for their auto insurance policy. Your marital situation is also a consideration for insurance providers. Those who are single are usually involved in more accidents than those who are married. If you are a student, you usually are the ones that can catch a break because you are thought to be more responsible; therefore, you are often offering a discount on your premium.
Other Determining Factors
While the above mentioned factors are certainly important and contribute greatly to how much you will be charged coverage, there are still other factors that will be considered. An automotive insurance company may also consider a persons credit-based insurance score. A low credit score indicates risky driving behavior. A person’s occupation is also considered. There are some professions that are considered high-risk professions, such as lawyers and doctors. Low-risk occupations include someone like a teacher. So don’t get annoyed if you think the insurance company is prying into you business, they are doing so in order to calculate your insurance rate.