When it comes to deciding what to charge you for your car insurance premium, a car insurance company uses a variety of statistics to determine whether you're a high or a low risk driver. If you're high risk that means that there's a better probability of a claim being filed on your car insurance policy. As a result, the insurance company will over you coverage at a high rate. This means that, in order for you to get the best rate possible, it's important to know whether you're high or low risk when you're looking for quotes. If you know what the car insurance company knows, it makes negotiations easier and you can better determine whether the quote you're being offered is fair.
The best way to determine whether you're high or low risk is to do what the car insurance companies do first: look at your driving record. Your driving record is the best and fastest way to determine your level of risk and thus your car insurance rate, simply because it's based on the cold, undeniable facts of your driving habits. Insurance companies use something called a Motor Vehicle Report, or MRV, to find this information. Your MRV contains information about any car accidents that you've been involved in and any traffic citations that you've been issued. State law often requires that insurance companies only make judgments based on the last two years of your motor vehicle report, so older accidents won't apply and won't bring your insurance premium up.
Of course, statistics also figure heavily when determining insurance rates and whether or not you're considered high risk. For example, men statistically file more car insurance claims than women, so they're a riskier group to insure. Younger drivers are also higher risks for obvious reasons. Even the neighborhood that you live in can change your risk level and your car insurance rates. Neighborhoods with higher-than-average amounts of crime usually have higher-than-average car insurance rates, as auto theft is a common auto insurance claim and a very expensive one for auto insurers to pay out on.
To become a lower risk driver, you can't do much to change the insurance statistics. All you can really do is drive carefully. If you get a traffic citation or if you're involved in an accident, get court supervision and consider taking driving classes to lower your car insurance rate and risk level. Talk to your car insurance agent for more tips for bringing your premiums down, and when you look for a new car insurance policy, be sure that you're aware of every element of your driving record in order to get the best rate possible.