Most drivers including myself do not put much thought into car insurance outside of maybe getting a few online quotes. What you do not realize is that, behind the scenes, there is ton of number crunching and “profiling” that occurs to arrive at the premium that you are offered. We have compiled a list of just a handful of the factors that you most likely have not thought about.
What you first need to understand is that insurance is a huge numbers game. Insurance companies have algorithms that process huge amounts of information to calculate their risk insuring each driver. This means they are digging through your driving history, details about your area, and much more. Insurance companies always “win” in the big scheme of things turning a profit on the insurance premiums that they collect. The bottom line is that they need to collect more money than they pay out in claims.
5 Reasons to Consider:
1. Location, location, location!
As most of you know, the big insurance companies are national. They offer insurance to people from Nome, Alaska to Key West, Florida. They know exactly which areas drivers are at higher risk for accidents and as a result will increase (or decrease) your premium accordingly. I am sure some of you have experienced a premium change after moving as little as one single zip code! This is their big game of number crunching at work.