Insurance Rate Classes And What They Mean For You As A Driver
Car insurance premium are determined based on the level of risk for insuring the driver. Factors that may have an impact on the cost of future claims are used to develop insurance rate classes. Statistics, car characteristics, use of the vehicle, driver profile and driving behavioral patterns impact car insurance premiums. These crucial facts are the bottom line when assigning car insurance rate classes to drivers.
Before car insurance is issued, relevant data is collected through a written or online application or a personal interview. The applicant provides details so the insurer can review their public motor vehicle driving record maintained by the Department of Motor Vehicles. Maintaining a clean driving record helps lower car insurance premiums.
Collected data determines the car insurance rate classes being assigned to applicants. Several factors are considered before a final decision is made. First, the insurance company finds out the model, manufacturer, age and value of the vehicle. Certain vehicles tend to have a history of higher insurance claims. A wise driver verifies the cost of car insurance before buying a vehicle.
Next, the driver's history is carefully examined by the insurer including sex, age, marital status, place of residence, government reports regarding their driving record, at fault accidents and violations or citations. A checkered driving history often means higher car insurance premiums because there is a higher level of risk a claim could be filed.
Even if a driver has a poor history, defensive driving classes can help improve their standing. The course is just a few hours and can be taken online in many states. A certificate is issued which helps to reduce insurance premiums and offset events such as tickets and citations. A good driver with a clean driving record enjoys the lowest car insurance premiums.
Coverage also helps determine the cost of car insurance. Extent of coverage refers to liability limits, deductibles, and the type of losses that will be covered, underinsured or uninsured motorists, comprehensive and collision. Optional coverage can boost car insurance premiums and put you into other car insurance classes.
When insurance premiums are figured, the system creates groups of drivers and vehicles, referred to as actuarial classes. These classes are based on the driver, the vehicle and the extent of insurance coverage desired. Other important factors such as age and driving record create the unique car insurance cost for each driver.
Insurance rate classes vary according to changing circumstances. If an outstanding driver gets several tickets or is involved in an accident, their car insurance premiums are likely to go up. Good driving habits must be ongoing to maintain the lowest possible car insurance rates and ensure safety on the road.