What is the basis for determining the premium rate in insurance?
The amount that you pay is based on your age, the type of coverage that you want, the amount of coverage that you need, your personal information, your ZIP code, and other factors.
Who will access the risk and determine the terms and premiums?
Insurers will evaluate historical loss for perils, examine the risk profile of the potential policyholder, and estimate the likelihood of the policyholder to experience risk and to what level. Based on this profile, the insurer will establish a monthly premium.
What do insurance companies use to determine rates?
All insurance companies use data and statistics to predict levels of risk for various individuals or groups. This risk calculation information is also used to develop rating plans. Generally, higher risk factors will result in higher premium rates and lower risk factors will drive premiums lower.
What are the factors that insurance companies use to determine your premium?
Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age, anti-theft features in your car and your driving record.