Reader’s Question:

What is the difference between the car insurance for high risk driver and the one for low risk driver?

Andrew

Colorado Springs, CO

The main difference between car insurance for high risk driver and car insurance for low risk driver is the premium rate. Basically, insurance premium rates are based on the risk level of a person. The higher the risk, the higher the rate would be.

Risk level is determined by a couple of factors. Some of these factors include the age, the gender, and the marital status. Some companies regard adults, female, and married drivers as low risk drivers because they normally register less traffic rule violations and/or accidents. On the other hand, young and unmarried male drivers are regarded as high risk drivers because they are prone to more road accidents, and statistically, they commit the highest number of traffic violations.

Other factors considered by car insurance companies are the occupation of the driver, the members of its household, the driving and credit records, and the specifications of the car being insured. The latter is regarded as one of the most important factors because it determines what kind of protection the driver would need for his car. For example, if the car is custom-made, it means that repairing or replacing it would entail a bigger expense. In this case, the owner may want to get protection intended to cover the car’s expensive repair in case it gets damaged in the future.