Vehicle Insurance Premium
Reader’s Question:
Can you explain what factors affect vehicle insurance premium? Thanks!
Timmy
Bowling Green, KY
In short sentences, I will explain to you what I know. Let me first start with Classifications. Classifications that are used as basis for your vehicle insurance premium are: the vehicle – type and model, age, and actual cash value (ACV); driver – age, marital status, gender, driving record, profile report, and location of residence; and the type of coverage – liability, comprehensive, collision, deductibles, etc.
Teenagers or senior citizens, for example, belong to different “age groups.” Now, these are groupings under special classification or groups being categorized above or below from average. A change or variation from this grouping, like for instance, a shift from one group to the other will determine the cost of your annual or monthly vehicle insurance premium. And also, a variance or change on your group would determine your assigned risk level.
In summary, factors are divided into three classifications: the vehicle, the driver, and the type of coverage. These classifications are further classified and broken down to details such as age, type of model and make, manufacturer for the vehicle; age, gender, marital status, profile of the driver; and the type of coverage such as collision, comprehensive, etc.
I hope I answered your question, Timmy.