Are you surprised when you learn a friend or family member is paying a different auto premium than you are, even when they are driving a similar car? As Preferred Insurance can tell you, many factors are considering when determining the price you will pay for auto insurance. This is a process called underwriting.
Join the Crowd
After you submit an application for auto insurance, an underwriter reviews your application, though these days a computer does most of this work. One of the first things the underwriter will do is place you in a risk pool – a group of similar drivers the insurer believes will cost them due to the expected number of claims submitted.
Peek at Your Driving History
The premium you pay will be based in part on your motor vehicle record. The insurance company wants to know how many accidents you have been in and how many claims you have submitted over the course of several years. Only your past three-year history will affect the premium you pay, but insurance companies will often look further to determine whether you are a risk they want to do business with. They may look at your credit history, too.
Preferred Insurance can help answer any questions you might have about auto insurance. You can also request a quote online.