Car insurance providers have a lot of techniques in evaluating the risks that they are involved in their policy shoppers. These techniques are all part of the general term called risk pooling. Risk pooling is the assessment of insurance providers of their customers if they are associating themselves in an investment or a liability. This is also the way in which one can lower his premiums. Here are some of the factors companies take a look in computing for premiums:
- The most common factor is age. This is because age is closely related to safe driving. Statistics show that adults aged 25 up to 50 have lower probabilities of being involved in an accident compared to teenagers and seasoned citizens that have higher risks of accidents.
- Gender is another factor that determines premium rates. Studies show that women are less likely to be involved in a vehicular accident than men. This is why women get lower premiums compared to male drivers.
- Marital status also determines premiums. In this case, married people have lower premiums.
- The geographical location of the policyholder determines the premiums as well. This is because there are places that are considered as hotspots or places wherein crime is widespread and there is a high risk that the car will be stolen or damaged. However, security measures installed on vehicles lessen premiums. A garage is a great way to cut down on car indemnity rates.
- The driving history of the policyholder plays an important role in the price he pays. To keep things simple, drivers with bad driving records or those who violate laws and traffic rules are charged with higher premiums.
- The vehicle type also indicates the price you pay. Luxury cars, SUVs, and other expensive vehicles are charged higher rates because of the higher risks of being robbed and the high price of its spare parts and repairs.
- Believe it or not, credit scores also bear an effect on your premium rate. This is because it is a sign of how one person manages the responsibility of paying bills. Good credit scores gain low premium rates and the other way around.
- The current occupation of the policyholder also affects the premium rates one pays. This is because some jobs are risky which is why owners are charged higher.
- School grades also matter in car insurance. Students who excel at school are granted lower premium rates because they are seen as more responsible in grades and are seen to be more responsible on the road as well.
These are just major factors. There are other factors that affect your premium as well.