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Driving on Road

How Do Insurance Companies See Me?

Most drivers are aware that there are many factors that determine their monthly auto insurance premiums, but what those factors are is a mystery to many. One of the most important factors is how an insurance company sees a driver.

There are three different types of drivers that providers differentiate between. If you were to fall under one of the preferred categories, you will not only see significant discounts in your premiums, but you will also notice the insurance company being very lenient towards your needs because they want to keep you on as a client. However, if you are on the opposite side of the spectrum you will find it very difficult to get a good deal on any kind of insurance policy from any carrier.

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The Preferred Risk Driver

The driver categorized as having preferred risk is the ideal client for all insurance companies. Simply put, they are the least likely to be involved in an accident. This comes with a lot of perks as you will not only get great rates, but you will have a lot of negotiating power in general, since your provider will want to keep you on as a customer. If you are unsatisfied you can simply leave, as there are plenty of other providers that want your business.

The characteristics which define a preferred risk driver are pretty obvious. They have clean driving record that is completely free of any kind of violations, major or minor. It helps if they have a great credit rating and if they are a homeowner because it indicates that they are stable and reliable. Lastly, they should have very few claims on their record, even if they were not at fault.

The Standard Risk Driver

This is how most drivers are classified. This means that most characteristics, which define you and your driving habits, are average: very few minor violations on your record and very few insurance claims. The standard driver can even have one claim where they were at fault, but usually no more than this. If this describes you then your insurance rates will be average and you will still have your choice of carriers. You won’t be offered a Good Driver discount, but you will still be eligible for many other discounts.

The High Risk Driver

Risk Dial

This is one category you never want to fall under because you will suffer heavy penalties on your premiums. If you are seen as a high-risk driver, it usually means that you have plenty of violations on your record, which can range from minor traffic violations to a DUI. Take that coupled with a large number of claims filed in a short amount of time and a bad credit rating and you have the kind of customer that most insurance providers can do without. If you find yourself in this situation, the good news is you always have the chance to improve your status by exhibiting the characteristics of a Preferred Driver over a period of several years. The exact time frame will depend on what you’ve done wrong to place yourself in this category.

For more on high-risk drivers click here.