How Are Drivers Auto Insurance Rates Calculated?
Posted by Tom Carolan on Tue, Jun 15, 2010 @ 04:25 PM
To determine drivers auto insurance rates, auto insurance companies look at 5 key factors in determining driver's auto insurance rates. First, they look at basic demographic information, such as their age. If the driver is less than 25 years old, then the rates will be higher than someone who is older. Also, drivers aged 50 to 60 get the best rates because they are typically the safest drivers.
Secondly, insurers look to see if the driver is single or married. Married drivers tend to have less expensive rates compared to single drivers because married drivers have less accidents and traffic violations compared to single drivers.
Third, the geographic area in which a driver lives helps determine rates. For example, someone living in a large U.S. city will have higher rates than someone who drives in a rural part of America. This is because drivers who live in rural areas statistically get into less accidents, and the incidences of theft and vandalism is smaller in rural areas.
Fourth, insurers check your driving record. Drivers who haven't had any traffic violations or accidents will be awarded with cheaper rates compared to a driver who has had multiple speeding tickets and accidents.
Lastly, the type of car that the driver drives is influential in determining auto insurance rates. There are variations in rates depending on the vehicle's purchase price, mileage, make, year, model, and safety devices that may be installed.