How Insurance Rates Are Determined
Underwriting is the process by which an insurance company considers your application and evaluates your driving record and other factors to see if you meet its guidelines. Insurance companies use a variety of factors to determine the level of risk each applicant presents. Each company will use its own underwriting guidelines to decide whether or not to insure a driver voluntarily. Some of the most common factors are: your driving record, where you live, type of automobile and use of automobile.YOUR DRIVING RECORD
Your driving record will have the largest impact on your insurance premium. North Carolina insurance points are charged for at-fault accidents and convictions for moving violations that occur within the experience period. The experience period is the three years immediately preceding the date of application or the preparation of the policy renewal.
WHERE YOU LIVE
The area you live in will also affect your rate. Insurers will consider vehicle and population density, road conditions, repair rates, hospital and medical costs, and the number of accidents and other claims in a particular area. Normally, urban areas have higher rates than rural areas.
TYPE OF AUTOMOBILE
The likelihood of theft, cost of repair and replacement, and the style of vehicle (sports car, SUV, station wagon, etc.) will influence your premium. For example, a sports car will normally have a higher premium than a family sedan.
USE OF AUTOMOBILE
The more you use your vehicle the more you may pay in premium. A vehicle you drive 20 miles to work everyday is considered a greater risk than a vehicle only used occasionally.
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