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Insurance companies use a variety of factors to determine a policyholder’s likelihood of experiencing an accident or loss. The cost of auto insurance for different drivers varies, as the level of risk for the insurance company varies. The following are the main factors that may affect your premiums.
Driving History
Insurance companies consider drivers who have had an accident or received convictions for driving violations as higher risks. Companies may charge such drivers higher rates for automobile insurance than those with driving records free of accidents and violations. Each company has underwriting guidelines to determine what kind and how many accidents or violations during a specified period constitute a high-risk driver.
High-risk drivers who cannot get auto insurance through ordinary methods may obtain coverage through the Florida Automobile Joint Underwriting Association (FAJUA), a risk pool. All insurance companies authorized to sell auto coverage in Florida contribute to the FAJUA. For more information on the FAJUA, contact your insurance agent.
Type, Model, Year, Value
Expensive or high-performance vehicles and some sports cars cost more to repair or replace. Such vehicles may also be inviting targets for potential thieves or vandals. Insurers will usually charge a higher premium for coverage of these vehicles.
Territory
Where you keep and drive your vehicle also influences your premiums. Insurers consider the vehicle and population density, road conditions, repair rates, medical and hospital costs, and the number of accidents in a particular area. For example, urban drivers may pay higher premiums than rural drivers. The rates used for territories, even those close to each other, may differ because of these and other factors.
Gender
Statistics show that males suffer more than twice as many fatal accidents as females. Insurance companies typically charge higher premiums for males, especially those younger than 25.
Age
Statistically, the majority of accidents in Florida are caused by drivers younger than 25 and older than 65. Based on these statistics, the insurance company may charge higher premiums for these age groups.
Credit History
Insurance companies are permitted to use credit history as one of the factors that determine risk. Your credit history may affect your premium amount.
Vehicle Usage
The distance you live from your work place or school may affect the cost of your insurance because it determines your daily exposure to risk. Changing vehicle usage (i.e., from personal to commercial) can affect the amount you must pay for coverage.
Changing Cars
If you change cars, review all your vehicle components and safety devices with your agent to be sure you are getting all the discounts for which you qualify.
