Insurance Liability Profiling

Insurance liability profiling is a common practice for providers. Click here for the lowest insurance quote in your state.

As dated a concept as it may seem, marital status does mean a great deal to insurance companies. Most insurance liability policies say that married people are less likely to be involved in car accidents. So, when you’re calculating your needs, being married probably adds another driver to your policy—but it moves you into a better risk profile.

For adult operators, there are only three classifications based on age and sex—all other classifications relate to use of the vehicle. However, on the other end of the lifespan from the youthful operator, senior citizens are the main adult classification. Older drivers pay more for less insurance.

Insurance liability profiling

If you’re a young driver insuring yourself, you’ll pay more than any other age group. Depending on where you live, you may have very few choices about what kind of insurance you can buy. If you’re a parent or guardian who has a young driver in your family, he or she will likely be the single biggest cost driver In your insurance premium. If the young driver qualifies, inquire about good student discounts.

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Insurance liability profiling can go further in the age group. Senior citizens can usually get discounts if they successfully take driver safety courses. Also, their discounts for keeping various lines of insurance—for instance, homeowners and personal liability with the same company are sometimes bigger.

Periodically, demographic premium ratings are challenged in court. The often-cited 1983 Florida appeals court decision State Department of Insurance V. Insurance Services Office defended the practice of using demographic factors in determining how much insurance a person can buy at what price.

The decision overturned a rule prohibiting insurers from, “with respect to premiums charged for automobile insurance, unfairly discriminating solely on the basis of age, sex, marital status, or scholastic achievement.”

The Florida court held that the rule was an invalid exercise of delegated authority. It reasoned:

In enacting this statute the legislature obviously intended to permit discrimination based on sex, marital status, and scholastic achievement so long as this discrimination is not unfair or based solely on these factors. This is called insurance liability profiling.

YOUR DRIVING RECORD

While who you are is the primary factor that influences how insurance companies look at you as an auto risk, there are secondary rating factors based on some specific variables unique to each individual. These secondary factors also determine your coverage needs so far as insurance liability is dealt out of the equation.

Your driving record (what insurance companies call sub-class) is the most important of these secondary factors. Insurance company statistics say that, the more accidents you have, the more likely you will be involved in another accident.

If someone in your family has a bad driving record, you need to consider two things. First, you may be limited in what kind of insurance you can buy. Second, you may have different needs than you thought you did. While a high-risk driver increases your insurance costs, he or she also increases your need for

Age impacts your Insurance costs on the tow and high ends—under 24 years and over 65 years will make coverage more expensive. You may have to adjust liability limits accordingly.

List moving violations by charge (speeding, reckless driving, driving while Intoxicated). If a driver has had several violations, check his or her license status.

List damages related to at-fault accidents, if that information is available. This concludes the article on insurance liability profiling.