Auto Insurance Risk Selection

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Auto insurance risk selection is the process by which auto insurers determine whether or not to insure an individual and what insurance premium to charge. The auto insurance premium is determined by the auto insurance company.

Auto insurance premiums can vary depending on many factors. Those factors can include the auto characteristics, the coverage selected (deductibles, limits), the profile of the driver (age, gender, driving history) and the usage of the vehicle (commuting, dailyand annual miles driven).

Determining the costs of auto insurance involve gathering relevant historical data by referencing the applicant's public motor vehicle driving record. Such data results in a classification of the proposed insured to a broad class for which auto insurance rates are assigned based upon the experience of the auto insurance company. Many factors are relevant when auto insurance companies assign a class or risk level, such as age, sex, marital status, location of residence and driving record.

The current system used by auto insurance companies creates groupings of automobiles and drivers based on the following types of classifications.

• Vehicle: Age; manufacturer, model; and value.
• Driver: Age; sex; marital status; driving record, violations (citations); at fault accidents; and place of residence.
• Coverage: Types of losses covered, liability, uninsured or underinsured motorist, comprehensive, and collision; liability limits; and deductibles.

For example, the following information would produce a unique auto insurance cost:

• Vehicle: Age - 7 years old; manufacturer, model - Ford, Explorer XLT; value $18,000
• Driver: Age - 38 years old; gender - male; marital status - single; driving record (based on government reports) violations - 1 point (speeding); at fault accidents - 3 points (one at fault accident); place of residence 33619 (zip code)
• Coverage: Types of losses covered; liability - yes; uninsured or underinsured - no; motorist comprehensive - yes; collision - yes; liability limits - $100,000/$300,000/$50,000; deductibles - $500/$500.

With auto insurance companies taking so many factors into consideration it can be hard to determine which factor is causing you to pay substantial amounts for auto insurance premiums each year. At Utahhomeandautoinsurance.com we would like to help you save money and offer a comprehensive review to insure you are getting the best value possible.

Click Here for your FREE Utah Auto Insurance Quote!