Decoding Your Risk Profile

Insurance pricing is all about risk. An insurer predicts the likelihood of you making a claim and sets your premium accordingly. Here’s why the factors above matter so much:

• Age: Statistically, drivers under 25 have less experience and are involved in more accidents, making them the highest-risk group. Premiums typically decrease significantly after age 25.
• Vehicle Type: The more a car costs to repair or replace, the more it costs to insure. Sports cars have an additional surcharge because they are associated with higher speeds and more expensive claims.
• Coverage Level: This is a direct measure of how much the insurer might have to pay. Minimum liability covers only damages to others, while comprehensive coverage also protects your own vehicle from theft, weather, and more. More coverage equals more protection and a higher cost.
• Deductible: This is the amount you agree to pay out-of-pocket before insurance kicks in. By choosing a higher deductible, you are taking on more personal financial risk, which reduces the insurer’s risk. They reward you with a lower premium.
• Driving Record: Your history is the best predictor of your future behavior. A record with tickets or at-fault accidents signals a higher likelihood of future claims, leading to significantly higher premiums.