LOS ANGELES, Aug. 9, 2019 /PRNewswire-PRWeb/ -- Cheapquotesautoinsurance.com has launched a new blog post that explains how car insurance companies classify drivers.
For more info and free car insurance quotes, visit https://cheapquotesautoinsurance.com/how-are-risk-categories-determined-by-insurance-companies/
Car insurance companies are using multiple factors to determine insurance premiums. Furthermore, insurers classify drivers in several categories. From the insurers' point of view, there are three major categories of drivers. These are Preferred (or premium), Standard, and High Risk.
- Preferred/premium risk. Preferred drivers are those policyholders that cost their insurers very little or no money at all. Only the best and safest drivers can be considered preferred. Policyholders that manage to keep their driving records clean for five years or longer are likely to be considered preferred by their insurers. A good or excellent credit score is another characteristic that preferred drivers have. Drivers will have higher chances to be considered preferred if they are driving vehicles fitted with many safety and anti-theft devices. Also, preferred drivers are likely to drive fewer miles per year and they have a small number of registered drivers on their insurance policies.
- Standard risk. Most car owners are considered to be standard-risk drivers. These drivers only need to improve one or two things before qualifying for preferred rates.
Standard drivers usually have one or two traffic violations, or they might have had an at-fault accident in recent years. The credit score of standard drivers is average. The insurance rates of standard drivers can be quite competitive, especially if they have only one point to improve in order to be considered preferred drivers.
- High-risk. Drivers can get labeled as high risk because of their age (too young or too old), a high number of traffic violations in a short period, bad credit score, or they have a coverage lapse. Drivers that are considered high risk will have to pay extremely high insurance premiums, especially if they must carry full coverage to satisfy lien holder requirements on financed vehicles.
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SOURCE Cheapquotesautoinsurance.com
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