If you have not checked in with other insurance agencies in a while for a car insurance quote, you might be surprised when you call a company and the agent asks you dozens of questions. Most insurance agents do ask a lot of questions when they are offering quotes, and this is because they base their quotes on so many different factors. Here are several things to know about insurance quotes and the factors used to determine the costs of a policy.
The Main Issue Is Risk
The first thing to understand is that insurance companies base quotes on risk. Risk is something that refers to the likelihood that a person would file a claim that the insurance company would have to pay. Insurance companies charge higher rates when the risk levels are higher, and they charge lower rates when risk levels are low.
The purpose behind this is protection for the insurance companies. They want to protect themselves when they offer insurance to people, and they do this by analyzing a person's risk level.
They Base Risk on Statistical Information
Insurance companies also base quotes on statistical information related to a lot of different things, including demographics. For example, insurance companies have found over the years that certain age groups of people have higher risks than other age groups. Because of this, they charge higher rates to people in the high-risk age categories. The same is true for other types of demographical information, such as gender and marital status.
When they calculate your quote and determine your risk level, it is highly based on the results of other people's actions in the past, and there is very little you can do about this.
They Also Use Your Personal Details
In addition to determining your risk level from statistical information, an insurance company is also likely to factor in your personal details. One of the most important personal details used in calculating quotes is your driving record. If you have a poor driving record or a history of insurance claims, you will pay more than a person with a great driving record and no history of any claims.
The type, age, and condition of your car also matters to insurance companies, and this too will affect the amount you will pay for your policy.
Getting an insurance quote is easy to do, but it does require answering a lot of questions. To request a quote today, contact a car insurance company in your city.Share