Auto insurance companies classify drivers based on the amount of risk they pose, meaning the likelihood that they’ll file a claim and cost the insurer money during the policy period. Insurers determine a driver’s risk level by looking at his or her personal information and associating it with the loss experiences of past customers who had similar characteristics. Your driver profile and your history on the road can tell insurers a lot about how you’ll likely act behind the wheel in the future. Common factors carriers look at to predict risk include but are not limited to:
Not all of these factors are used in every state or by every insurer, but they are some of the most common.
Drivers who fall into certain categories may have an exceptionally hard time finding affordable coverage or, in some cases, an insurer that will offer coverage to them at any price. Choose one of the driver categories below to learn more about why finding affordable coverage may be difficult for them:
Insurers look at a lot of factors to help them classify risk. For example, insurers in almost every state in the country are allowed to take an applicant’s credit information into account when setting rates. Numerous studies have shown that your financial history is a good predictor of how much you’ll end up costing your insurer.