Risk Factors Driving Insurance Costs


With the economic recessions not showing any signs of slowing down, many Americans are cutting back on their car insurance.

Risk Factors Driving Insurance CostsExperts warn that the recent data about uninsured drivers should be a cause of concern. Some states are reporting that their uninsured motorists are nearing the 20 percent mark. As a result, more Americans are at risk of getting in an accident with them. This would mean that car owners and drivers have to shell out more money to purchase additional insurance to protect themselves.

Industry specialists, however, contend that car owners need not skimp on insurance to save money. They point out that insurance companies rate policyholders based on several factors. These factors usually involve several aspects that would present risks.

According to experts, most insurers pay attention to the vehicles owned by the policyholders. Generally, more expensive vehicles cost more to insure. They explain that the amount of time motorists spend on the road each day can affect their premiums significantly. Car owners who drive more can expect higher premiums than those who travel less. The safety features and devices installed in a car can also be mitigating factor for insurers assessing risk. Insurance firms like to see advanced safety features installed in vehicles. The safer the vehicles and the passengers are, the less risk for theft or injuries and the less possibility for insurance claims.

Age can also play a vital role in insurance premiums. Insurance providers rely on statistics to determine whether a particular driver or motorist can be more expensive to insure. According to statistics and research, some age groups are more prone to accidents. Drivers under the age of 21 are considered fairly inexperienced, hence the more costly insurance. Motorists over the age of 75 can also pose problems for insurers because of slower reflexes and mental skills.

Most insurance firms also determine rates based on accident reports and statistics for a particular area. Cities and towns that see more than their fair share of car accidents can see higher premiums. According to analysts, car owners should routinely check the accident rate for their locality to see if they can ask for lower insurance premiums.

Lastly, the policyholders’ driving records can also affect their insurance rates greatly. Traffic tickets, citations, and even DUIs can limit the drivers’ prospects of availing affordable insurance. Experts recommend following traffic rules and regulations to avoid bad driving records. However, teens and adults alike can take defensive driving courses to get lower premiums. Some insurers would recommend certified driving schools. By enrolling in and finishing the said programs, motorists can qualify for discounts from their insurers.