Factors That Affect Insurance Premium Charges

When calculating insurance premium fees paid by individual companies, various factors are considered. These factors vary depending on the jurisdiction of the area and local laws. The main source of insurance premiums paid is based on a number of factors that have been calculated.

The first of these factors; And many times the most important; Is the age of the driver. The age of the driver has a direct impact on the insurance rate that can be charged from the person. Statistics have shown that young drivers are careless and inexperienced. This effectively makes them high-risk customers, and unlike the older group of drivers, their premium is higher.

Driven vehicle is also considered another important factor. A much faster sports car with higher specifications will usually cost more; Unlike a small car that has a small engine. This is because a sports car is more likely to be in an accident than a vehicle with smaller specifications.

In some instances, gender has been paid as a factor to determine the rate of premium; However, it has received severe opposition from women. Statistics show that female drivers are involved in more accidents than their male counterparts; Thus some companies charge more than women, as their risk of being involved in an accident increases.

If you are married, you will have to pay a lower premium in most cases; Unlike other individuals who are single. Statistics have shown that married people have less tendency to be involved in accidents; And when the equation contains facts, this calculation places them as low-risk customers; Thus they have to pay a very low premium.

Some insurance companies have started testing an insurance cover that is based on the distance traveled by the vehicle. This is a product marketed primarily to those who rarely use the vehicle, and do not travel much. If they cover a lower distance, the option to convert the distance they cover to a lower premium; Unlike drivers of long distance vehicles.

Credit history can also be a factor used in determining insurance premiums paid. According to the system, drivers with higher credit ratings are given lower premiums because they are considered to be lower risk customers than those who have lower credit ratings.