How Driving Statistics Affect Insurance Rates
Insurance Companies & The Role Of Risk
All insurance, whether it be for a house, a diamond ring or a car is based on the concept of risk. Insurance companies determine the rates they are going to
charge a motorist primarily on the probability of something adverse happening to the covered object. Insurers have a ton of data, fueled by statistics, that gives them a very accurate idea of the chances that a claim is going to occur. The higher the risk of a financial loss, the more a driver will pay for coverage.
Age & Driving Records
Based on the data they have, insurance companies have proven that age has a great deal to do with the level of risk of a driver having an accident. Younger motorists, usually between ages 16 and 24 tend to crash their cars much more than any other age group. This is largely due to their inexperience behind wheel, as well as their under developed skills in decision-making. Collision rates start to fall at age 25 and will remain stable until a driver approaches their mid 60’s. Older drivers tend to have slower reaction times than their younger counterparts do, as well as diminished vision quality.
Beating The Odds – Lowering The Risk For Better Rates
While insurance carriers will always use statistics to try to predict the future with regard to risk, here are some great strategies on how to save some money on your auto coverage.
- Defensive Driving Courses – Usually sponsored by the local motor club, police department or insurance company, safe driving classes teach motorists best practices when it comes to avoiding mishaps on the road. Many insurers will give safe drivers a discount for successfully completing such a course.
- Good Student Discounts – Statistics show that young drivers who are also good students have a much lower risk of having an accident than teens who don’t hit the books. Good students tend to be more responsible not only while driving, but in all areas of their lives. If you happen to have a young person in your life, encourage them to do their best in school. It will save you quite a bit of money in the long run.
- Multi Car Discount – Family members who live in the same household can often get a discount on their car insurance by putting all of their vehicles on one policy. Because the insurance company is collecting more premium on multiple cars, they are often willing to offer a discount on the total package.
So How Do We Predict The Future & Determine Your Rate???
Insurance companies have relied on statistics for decades in the attempt to assess risk and determine the rates that motorists will pay for auto coverage. Historical data has proven to be an extremely accurate way to evaluate the chances of someone having an accident, based on such factors as gender and age. While insurers will always rely on statistics to set rates, individual motorists can take proactive steps to lower their annual insurance costs. By maintaining a clean driving record, participating in a safe driving course and for young people, getting good grades, drivers will be well on their way to enjoying some great discounts on their car insurance.
For more information about our auto insurance plans in Chicagoland, visit Insure on the Spot today for a free quote. Quotes in just 2 minutes!
Happy Motoring! 🙂