For insurance companies, assessing risk is all about numbers. Insurance companies do not charge the same price for all customers. Each customer is charged based on his or her calculated risk. So how do insurance companies calculate your risk? They look at a lot of data, including:

Credit history: People with good credit are statistically less risk. They drive more cautiously and have fewer claims. They are also more responsible toward home ownership.

Age: Youth = risk. Unfortunate but true. Younger drivers make poor decisions, and are more likely to be involved in an accident. The good news is that as you get older, your rates will decrease.

Address: Where you live is a factor. Live in the country? Then you’re less likely to have an accident. Live in the city? You’re more likely…because there are more drivers.

Driving record: This is obvious, but how you drive and what is reported on your driving record will haunt you. Are you a speeder? Reckless driver? DUI? If so, expect to pay for it…literally. Insurance rates go up for poor drivers. Just a fact.

Marriage status: Married drivers are considered more likely to drive with loved ones in the passenger seat; fewer accidents are reported in this group, perhaps because of a reluctance to take needless risks when children and family members are in their cars.

Gender: Men are more likely to have an auto accident than women. Sorry guys, women win again.

Health status: this typically only applies to life insurance. If you’re healthy, your rates are lower than if you have known health issues.

So insurance companies look at all this data and then crunch the numbers. This is performed by someone called an underwriter. It’s their job to assign a risk value to each and every insurance customer. If they do their job correctly, you don’t overpay or underpay.

Want to know more? Contact your independent Provident Insurance agent. We serve Plainfield, Greenwood, Avon, Brownsburg, Indianapolis, Carmel, Zionsville and the entire central Indiana area. Stop in one of our convenient locations to discuss your insurance needs today.