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How An Auto Insurance Company Determine Your Insurance Risk Level

Whenever you receive an auto insurance quote, be it a quote when you visit the provider directly or online insurance quotes, the auto insurance carrier will first have to weigh your risk factor because after all, they will be getting into business with you and they have the right to protect their investment. But the frequently asked question is – how do they determine your level of risk? They spend millions of dollars every year to try and determine patterns of risky investments in form of motorists who are unsafe for business. To come up with this, they have risk factors that allow them to pinpoint what type of a client you would be and the advantage is, the factors are all within your reach and controlling them is easy. This means by knowing what they are and adjusting your habits, you can get very cheap car insurance rates. Some of the factors are:

i) Age – when you are young of age e.g. a teenager, the rates are usually high because until you reach an age of about 25 years, you are considered a risky driver mostly due to inexperience in driving.

ii) Your credit rating – studies have shown that the lower the credit rating you have, the higher a risk you present as a driver and so by having a higher credit rating you end up having lower premiums for your car insurance.

iii) Your occupation – if you present lower mileages by for example working at home, then you get lower car insurance rates. The fewer times you spend driving the lesser risk you have of getting involved in an accident which in turn makes you a safe investment.

iv) Type of car you drive – the fancier your car is the higher the insurance rate you will be given by the insurance provider. This is because it is more likely to get stolen than an ordinary car. You may however get a discount if you take safety measure like anti lock brakes, low jack systems and the likes.

v) Prompt premium payment – if you have a history of not paying your premiums on time then you can only be considered as high risk but the opposite would lower your rates since you show responsibility.

vi) Clean driving record – the state of your driving record is a huge factor in determining the rate you will pay. If your driving record is clean, you can expect a cheap car insurance rate but if the opposite is true your rates will be much more higher.

There are other factors that you may not know such as your marital status because married people tend to be more careful drivers since they have their families in the car, gender and other factors. To learn more on this or if you have any other question you would like answered, you can enter you zip in the slot above and also get a free insurance quote from an insurance company of your choice.