Calculated Risk
Car insurance companies give cheaper rates to customers with the lowest risk. (Risk is how likely you are to be involved in a car accident or any other incident which makes insurance companies pay out money). After risk is calculated for each customer, they are placed in specific risk brackets.
Car insurance rates may vary from person to person because they fall into different brackets. The customers with the lowest calculated risk are charged the lowest monthly premiums. Customers in the highest risk bracket are charged the highest monthly premiums. Each person’s risk is determined by looking at these main points:
- Age
- Driving Record
- Location and population density
- Miles driven (per year)
- Sex
- Type of vehicle
* Other factors may be looked at depending on your auto insurance company.
Since your driving record plays a major role in determining your monthly rates, it would be very beneficial to keep your driving record as clean as possible. One way to keep your driving record clean is to attend Traffic School after receiving a traffic violation. Accidents also appear on your driving record, so it is also important to follow safe driving techniques and keep your vehicle as safe as possible. In our Safety Tips section, you can learn about various safe driving techniques as well as proper upkeep/maintenance for your vehicle.
