When purchasing for best-suit auto insurance, the insurance company collects information in order to quote the amount of the premium. Common information such as car manufacturer name, car model, social security number and estimated miles driven per week are asked by the insurer to the policyholder.
Apart from this information, insurance company also inquire the lifestyle, education level, occupation, number of the children for the auto insurance policy. Here is the inside scoop on this topic:
Classification to Calculate Risk
To disregard the ambiguity, insurance companies rely on predicting the risk depends on the many factors such as accident occurrence, vehicle theft, any type of damage or loss related to vehicle and the how many times claims are done for that.
In general, insurance agent or company spend about 10-15 minutes with the customer that is not enough to understand the risks factor. So they analyse the risk by filling a statistical data.
Insurers also use predictive modelling techniques to categorized customers based on the statistical data information. Some personal information is also gathered that can either boost or minimize the cost of auto insurance.
Financial Status
Insurance companies also analyse customers’ CIBS (Credit Based Insurance Score) based on the various information such as payment history credit accounts, bankruptcy etc.
Each insurance company has its own protected system to calculate the CIBS of the customer. In case of bad credit record, insurance application may be rejected. Moreover, maintaining good credit record and paying bill on time can save money on the insurance.
Customers’ Lifestyle
Single person are perceived as more risky than the married people. Occupation and education also play a great role in deciding the premium. If you are either an engineer or teacher or scientists, you have to pay a lower premium.
On the other hand, if you are currently enrolled in college and receiving good grades, it will help you get lower premium. Multiple insurance policies also help in lowering the policy premium.
How, Where, When and What Customer Drives
New vehicle has more chances of replacement in case of damage and so will always cost more to cover than old vehicle. How you drive, accidents occurrence and geographic location also matter in analysing premium for insurance policy.
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