How Are Policies Priced for Different Drivers?

Every person who approaches an insurance company for a car insurance policy is assessed individually. This means that while there are basic requirements and criteria to qualify for insurance, your personal driving history affects the end figure. Most insurance companies are accused of “silent discounting” but the truth is that there are standard facts that explain why your policy premiums are higher than that of your friend or family member.

Some of these standard factors aside from driving history are age, gender, vehicle type, insurance claims history, and residence. Once you have submitted all the documents required by the insurance company, the company then evaluates everything by computing the average cost to repair your vehicle (often based on the maximum damage), and then inputting your personal data. This personal data is assessed separately before it is inputted. The auto insurance company comes up with a probability ratio that you will get involved in an accident, have your car stolen, and other features you would like included in your car insurance.

For instance, if the assessed repair costs are $10,000 with a driver’s record with no ticket or incident, the insured will pay a lower amount than another person with a lowered valued car but with a single incident of DUI.


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