Insurance companies are careful about who they accept to insure because paying claims is expensive. So what are the characteristics that insurers look for? What tells them that one potential client is less likely to generate claims than another?
Here are the 10 most common:
1. Driving record. A provider will check for recent tickets or moving violations. Recent means three to 10 years. Why? There is a direct correlation between a poor driving record and a person’s tendency to adhere to accepted norms and meet responsibilities.
2. Credit score. This is another indicator of trustworthiness. It indicates the likelihood that you will pay you premiums — and on time.
3. Bankruptcy. Insurance companies want clients with the ability to manage their finances. They do not want your problems to become their problems.
4. Criminal record. This is indicative of your character and your history complying with rules and regulations.
5. Employment history. It is important that you have a demonstrated history of steady employment. Having a job means that you will earn money to pay your premiums.
6. Claims history. A history of excessive claims is the surest way to ensure that you will be denied coverage. Insurance companies do not want clients who are frequently involved with claims-generating situations.
7. Young drivers. Young drivers are involved in accidents more frequently than experienced drivers, according to statistics.
8. Gender. Women cost providers less than men. According to the numbers, women are safer drivers and the severity of their accidents is considerably less. Less damage equals smaller claims.
9. Repair costs. Some vehicles cost much more to repair than others.
10. Theft statistics. Providers charge higher premiums for vehicles that are more likely to be stolen. If it is attractive to car thieves, it is not to insurers.