Handyman Insurance – Additional Accident Risks that Can Affect Insurance
A motorist does not necessarily need to be involved in an accident to be affected, both positively and negatively. As automobile policy providers receive an application to provide coverage to a potential insured, there are a number of factors that are taken into consideration as a premium is calculated. The most common items that are used when calculating rates for policies are a driver’s age, gender, place of residence, claims history, driving record, and in all but few states, credit history. These factors are used by insurers to determine the risk of the driver being involved in a traffic accident and each factor is believed to be an indicator to help assess risks.
Unfortunately, particular motorists end up paying higher car insurance premiums simply due to uncontrollable factors such as their age and gender. For example, teenagers are four times more likely to be involved in traffic collisions than any other age group and therefore, insurers must raise premiums for such drivers to compensate for a potential loss; until these numbers begin to decline, teens will continue to pay high rates. On the same token, males are often charged more than females and this due to the accident-related data showing men having more involvement in auto collisions than women.
Location is also a factor that has an accident-related impact on policies. While particular rural areas are usually seen by insurers as less risky to provide coverage in, urban and densely populated areas are often considered riskier to insure. A state such as North Dakota has some of the lowest premiums in the nation which is attributed to a low number of claims and pay outs as well as a low number of vehicles per capita, whereas Massachusetts’ motorists pay some of the highest rates in the country due to opposite reasons. According to the Massachusetts Office of Consumer Affairs and Business Regulation the reason for this is because the majority of drivers are in densely-populated areas where accidents are more likely. Also, the state has a higher than average cost of medical care, vehicle repair and litigation costs, which translates to increased losses by insurers and is passed on to policyholders. As long as there is the risk of a traffic accident occurring, an insured motorist will be affected by the rate paid for coverage, whether they have been involved in a collision or not.