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Insurance is a risk-based business. Normally, each company wants to profit as much as possible. In this case, companies profit when they insure drivers who are less likely to commit an accident, make claims and always pay their premiums on time. Find out more and get free car insurance quotes from http://compare-autoinsurance.org.
Basically, there are 3 risk categories, each one with a different risk profile:
- Preferred (or Premium). This is a top tier category and includes the safest drivers. Clients placed in this category do not have any at-fault accident or have been involved in accidents in the past 5 years. Companies prefer drivers with minimal or zero claim history and reward them with better premiums, even for high coverage limits. Paying all premiums in due time and keeping an excellent credit score (above 800 FICO credit score) are also characteristics of Preferred drivers. Being over 25 years old and buying more than
$100kliability is also a must.
- Standard. This category puts the client right in the middle of the best and worst drivers. However, there is room to improve rates and be promoted to Preferred. Usually there is just one thing to be fixed in order to get to the next level. Standard drivers have one or two minor traffic violations, a maximum of one at-fault accident, good credit score and at least previous 6 months of insurance coverage
- High-risk. The worst drivers are placed in this risk category. Usually, these drivers have to work with non-standard carriers or dedicated carriers. Premiums will be significantly more expensive. To be classified as a high-risk driver, a person must have zero or very limited driving experience, to commit a major traffic violation and to have a poor credit score.
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