Brushes with the law brought about by careless driving is not only a legal concern. A colorful record of accidents and speeding may just haunt drivers in another way. These drivers will be surprised that they will be unable to obtain the most favorable car insurance rates with such a dotted driving record.
The logic behind such reasoning is easy to understand. Drivers with negative records are seen as risks more than drivers who have impeccably clean records. Any business would prefer to protect itself from obvious risks since it forms part of sensible business operation. Although insurance companies are engaged in the business of risks, they will not knowingly put themselves into trouble by not protecting themselves against greater risks.
There is such a thing as reasonable risks and there is also such a thing as reckless risks. Any reliable insurance company can readily gauge the difference between covering a reckless driver and a careful one. It will seek to protect itself from the perceived and actual risk by demanding higher pay for the same type of coverage.
Drivers with clean records can benefit from this set-up since they can take advantage of lower rates if not the best ones. All things being equal with regards to driving records, the basis for car insurance rates would depend on the car characteristics, the selected coverage, the declared usage of the car, and other data pertaining to the driver’s profile including gender, age, and marital status among others. These information are all important to the insurance company since they will all be used to approximate expected risks.
Luxury automobiles come with higher insurance premiums since physical damage to the car is more expensive to repair or replace. Vehicles that have higher speed capabilities also incur higher insurance costs because of higher risks presented by such feature. Statistical data related to specific car make such as malfunction, accidents, and theft is also considered in computing insurance premiums.
Many insurance companies are proposing for the establishment of standard procedures to monitor driving behaviour. This is still in the development stage as there are concerns about privacy intrusion. It is clear however, that driving records will always be a major factor in determining car insurance premiums.
About the Guest Blogger
Daniel is a car dealer who blogs on cars and related topics. One of his important information sources is www.insurancetown.com/car-insurance/.