Three Ways Car Insurance Companies Evaluate Driver Risk
There are all sorts of drivers on the roads today: single, married, professional, student and more. While shopping for your car insurance quote, you may come across the term “driver risk.” This term doesn’t necessarily mean that you are a bad driver. But what, exactly, does it mean, and where do you fit in?
Car insurance companies have always evaluated driver risk by reviewing a prospective insured’s driving history. Are you a new driver? Without a driving record, auto insurance companies take a risk to insure you until you’ve had a few years under your belt. New drivers can also expect higher rates because they are typically younger drivers. Younger drivers have yet to accumulate enough experience behind the wheel in real-traffic situations. As a new driver, the best measure to save money on your auto insurance quote is to be a good driver, avoid tickets and fines, and stay out of accidents.
Every car insurance company has an age bracket where you can be considered an older driver. Older drivers, while experienced, present a greater risk because of possible health impairments and disabilities that may increase the risk of an accident. If you’ve been with an auto insurance company for years, the company may be willing to discount your coverage as a matter of customer loyalty. A clean driving record always helps to keep your costs down.
Drivers who have a history of numerous car insurance claims are also considered a driver risk. This is because every claim, whether you are at fault or not, costs the car insurance companies to process and pay. Repeated claims are a red flag for driver risk and tell the insurance company that you may be an unsafe driver, for whatever reason.
There are a few select drivers who have a higher ratio of driving history to traffic offenses, including but not limited to, collision accidents, numerous citations and moving violations. Any history of alcohol or narcotics use while behind the wheel, such as DUI, especially affects your car insurance quote as a driver risk, and can even cause your coverage to be fully declined.
Drivers in this category may instead qualify for what is called nonstandard car insurance, with higher quotes and limited policy amounts. The best method to find out whether a nonstandard policy is available is full disclosure at the time that your car insurance quote is negotiated. This will help you avoid any later surprises or price-hikes.
All in all, the point is clear: responsible drivers receive the most favorable quotes. However, this doesn’t mean that high risk drivers have no options at all. Shop around as much you can, and find the policy that works best for you.