Underwriting Factors
Insurance companies underwrite to assess risk associated with an applicant. That is, what groups are at a higher risk to make more claims. The groups with a higher claim history will pay more for auto insurance. Underwriting factors that affect cost are:
Driving Record - Drivers with previous traffic violations and at fault accidents would be placed in a higher risk group.
Marital Status - Claims among married policyholders are less than single policyholders putting them in a lower risk group than single policyholders.
Residence - The location where you garage the vehicle (usually your residence) also affects the rates. More claims are made from urban areas than rural areas.
Age and Gender - Some age groups fall into higher risk groups. Teenagers have many more accidents than the rest of the population.
Use of Vehicle - Higher annual mileage will usually result in higher cost because of the higher exposure to risk.
Vehicles driven to and from work or school.
Type of Vehicle - The type and cost of the car you drive will affect the cost of the insurance.
History of Prior Coverage - If you were cancelled because of non-payment of premiums from a prior
Insurance company your rates in some states might be affected adversely.
"Better Risk Discounts" - If you qualify, discounts you should ask for:
Multiple Vehicles
Safety Devices - Automatic seat belts, Anti-Lock brakes, Air Bags etc.
Good Driver
Anti-theft devices
Driver Education courses for young and old drivers
This website may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting or tax advise. You may wish to consult a competent attorney, tax advisor or accountant. It is intended for informational purposes only.