“Being considered high-risk will make the insurance costs skyrocket. Find out when companies apply this label”, said Russell Rabichev, Marketing Director of Internet Marketing Company
LOS ANGELES (PRWEB) March 03, 2020
Insurance companies classify drivers in 3 main risk categories: Preferred, Standard and High-risk. Policyholders placed in the third category pay really expensive premiums, to compensate for the higher risk of making a claim or missing payments.
Drivers with a high number of traffic violations are considered high-risk. People with multiple traffic violations in the recent 3-5 years are likely to be placed in this risk category. At-fault accidents and DUI/DWI convictions will automatically make a person be labeled this way. Investing in Accident Forgiveness programs will help drivers avoid rate increases after the first at-fault accident.
Even lapse in coverage of just a few days will negatively impact future premiums. Insurance companies prefer clients that had continuous coverage over the course of years. Companies ask about recent coverage lapses before issuing coverage.
People with a low credit score are also considered riskier to insure. Most insurance companies take into consideration a client’s credit score when determining rates. Drivers with poor FICO scores should look for ways of improving their creditworthiness.
Teens are automatically considered high-risk drivers. Persons between 16 and 25 years old are considered high-risk, due to their lack of experience behind the wheel. However, teens can get a series of discounts, like a good student discount or for leaving the car at home during the academic year.
Seniors over 65 years old are also labeled “high-risk”. According to the CDC, there are higher chances of being involved in accidents after the age of 65. Diminished sight and hearing, plus medication will impair a person’s driving capabilities.
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