The Main Demographic Factors That Influence Car Insurance Rates

LOS ANGELES, Dec. 1, 2020 /PRNewswire-PRWeb/ -- Demographic factors play a crucial role in determining a person's risk profile. Insurance companies use various statistical data to predict how likely is a person to be involved in an accident and to file a claim. The most important demographic factors used by insurers are:

    --  Age. This is one of the most important rating factors. Teen drivers,
        below the age of 25, are considered high-risk drivers due to their lack
        of experience behind the wheel. Senior citizens, over 70, are also
        considered high-risk. Age-related medical issues, hearing and sight
        which start to deteriorate and prescription drugs are the main reasons
        why seniors are risky drivers and policyholders. The Insurance Institute
        for Highway Safety (IIHS) found that drivers ages 30 to 69 are much less
        likely to be involved in accidents.
    --  Gender. Statistical data shows that teen males are more likely to cause
        accidents than teen females of the same age. Things change in the case
        of senior drivers. Older females are more likely to be involved in minor
        accidents than their male counterparts.
    --  Marital status. According to a study done by The National Institutes of
        Health, drivers who were never married or divorced have a significantly
        higher rate of motor vehicle crash injuries than drivers who were
        married. Married people are considered more responsible drivers,
        especially since they transport their spouses with them. Getting married
        is really beneficial for men, from a financial point of view. A male
        driver with a clean driving record who marries will get his rates nearly
        halved.
    --  Occupation. Auto insurance companies correlate a person's risk of
        accident and their profession, and they can adjust the premiums
        accordingly. For example, delivery drivers and journalists are on the
        road constantly and thus are more likely to be in an accident, whereas
        airline pilots often just drive between the airport and home, and don't
        spend much time on the road. Others, such as police officers, paramedics
        and insurance underwriters are seen to be more careful than the average
        driver and receive better rates.
    --  The area where the policyholder lives. This is actually a more complex
        factor. Numerous details regarding the ZIP code will be analyzed.
        Besides the state's minimum, other elements like car theft rates, the
        cost to repair a car, road conditions, unemployment rate, and population
        density will affect the costs.

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