How Auto Insurance Companies Calculate Risk

How Auto Insurance Companies Calculate Risk

Auto Insurance

Purchasing auto insurance can be a complex task for both parties. As a customer, it is best for you to be well informed before you make your purchase. You will need to know and compare what the different auto insurance companies have to offer and find one that fits your budget as well as covers you with the correct level of insurance. Auto insurance companies will base their rates on how likely you are to file a claim in the future. A number of varying factors are used to determine that risk. They will offer a price that is attractive to you and at the same time cover the risk that you present. We will show you how auto insurance companies Calculate Risk.

How Auto Insurance Risk is Calculated

Driving Record
Your past driving record is the most important factor that auto insurers use to determine your risk. They make an assessment of your record and determine if you have had any accidents that you were involved in. They will look at whether you are accident prone or have caused accidents, and will look at whether your license has been suspended or revoked. Accidents can cost an insurance company a lot of money. If you have a clean slate, you will not have to shell out a lot for auto insurance. You can get the best rate by being a safe driver.

The Distance you Commute
The further away you stay from your work place, the higher you pay. The risks are much greater if you have to drive a great deal each day. Many auto insurance companies will have separate policies for people who live 10, 20 or more miles away from their workplace as this increases the risk of an accident significantly.

The Car you Drive
The car that you're driving is an indicator of the risk you present. If you’re driving a family sedan or a minivan, you pose less of risk than a person driving a sports car. However, if you are planning to get your sports car insured, you will have to pay more because of the risk it presents. The car that you drive is an indicator as to whether or not you are likely to drive in ways that may be more prone to causing crashes. If you are driving a minivan, chances are your family is in it and you will be driving safe.

Your Age
Statistics show that drivers under the age of 25 years and above 65 years are more likely to be involved in accidents and thus pay higher rates. If you are a young driver, you could expect to pay more for auto insurance.

Your Credit Score and Payment History
Many auto insurance companies will use your credit score to see the amount of risk that you present to them. A poor credit score will end up with you having to pay more for auto insurance. The reason that auto insurance companies make use of credit scores is to try to determine your ability to pay for your insurance premiums and other costs that you may have to bear. They also look at how prompt you are at making payments. They look at your previous late payments to determine risk. If you were late making payments in the past, you will have to pay more in order to cover the increased nonpayment risk.

Your Marital Status
Statistics show that married drivers are less likely to get in automobile accidents than drivers who are single. This is likely due to the fact that when you have family members in the car, you are likely to drive safer.

Getting Auto Insurance? Get In Touch With Us

Buying auto insurance can be complicated for you. Our reliable and trustworthy professionals will ensure you always get the best rates. If you are looking for auto insurance or you know someone who is, NY Auto Quotes is the Insurance Company for you. Call us at 800-490-6174 or email at We ensure you will drive away satisfied and happy.


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