Normal auto insurance coverage rates vary, depending on the driver involved. Each company decides how much to charge its customers independently, and each one decides how much risk it is prepared to assume on behalf of a policyholder.
The process of determining the level of risk that a driver present is known as underwriting. When someone applies for car insurance coverage, the insurance company asks a number of questions designed to help it determine the likelihood that the applicant will be in an accident and make a claim against his or her policy.
The best rates are given to auto insurance buyers who present the lowest risk to the insurance provider. To be placed in this category, a person must have been licensed for a number of years and have a clean driving record. The ideal auto insurance customer also drives a safe car and pays his or her premiums on time.
Newly-licensed drivers will pay more for their coverage because they don’t have a lengthy driving record to draw on for the insurance company. They are more likely to be involved in an accident, and insurance companies take this type of driver’s lack of experience behind the wheel into account when setting premium rates.
The majority of drivers fall into the standard category for auto insurance purposes, and pay rates accordingly. Being involved in accidents or accumulating moving violations can move a driver into a high-risk category and mean higher rates for auto insurance.