What are the factors that insurance companies consider before giving insurance?


While everyone would like to avail of auto insurance in order to secure their vehicles, it has to be realised that there are some limitations and advantages for getting auto insurance. There are certain factors that are considered by an insurer before providing auto insurance to anyone. People think of their own security and like to ensure that their premium money does not get wasted but even the insurers have to think about their own company’s security. This means that the insurance companies have to make sure that they do not provide insurance to those vehicles that are driven by more vulnerable drivers. Even if the insurance is provided to vehicles with such drivers then the premium amount is set high so that the insurance company does not lose all its money.

A few things that auto insurance companies consider while giving insurance include the age of the driver. It has been found that teenage drivers are more adventurous drivers and they are more prone to accidents than adult drivers. Teenage drivers are fresh learners and hence auto insurance companies do not trust their skills too much. Although if a teenager has studied from a driving institute and has achieved a good score on the card then it becomes easier to get vehicle insurance for the car based on merit.

Another factor that is considered while providing auto insurance is gender. Women drivers are more favoured while giving auto insurance. This is because it has been studied that women drivers are more careful and alert than male drivers. Male drivers tend to be more involved in accidents while at the wheel as compared to female drivers. It has also been seen that women drivers get fewer penalty tickets than male drivers. Finally the kind of car that needs to be insured stands as a major factor while applying for auto insurance. If the car is new and has advanced features and gives faster speed limits, then the insurance premiums are much higher and if the car is an ordinary one then the premium amount is lowered. The reason for this is that a new car automatically gives an adrenalin rush and the advanced features fuel the chances of an accident. This is the reason why auto insurance companies take the precaution of charging high premiums for high end cars.