Unsure About Auto Insurance Law? 9 Facts

How auto insurance law affects you depends on multiple factors. Having a fundamental knowledge of these factors can help any consumer when shopping around for necessary coverage. Here is a review of those nine facts:

1. Age

Almost every state in the U.S. has auto insurance laws concerning both the age a driver must attain to get coverage as well as ages where extra premiums are charged to offset the risk an insurance company takes when offering protection for young, inexperienced drivers. Unfortunately, young drivers are normally heavily penalized for this inexperience and many teenage drivers, remaining legal dependents of their parents, cannot obtain individual policies unless they have received emancipation status. The average age examined state by state is 25 to start qualifying for a decrease in insurance once obtaining a history of safe driving.

2. Gender

Those risk-taking men are charged higher rates than their safe-seeking female counterparts. Again backed up by statistical data proof, insurance companies lobby for laws allowing different rates based on different risks taken. Unfortunately, although it appears as if it is gender bias, experiential data reporting points to men as a higher risk category subsequently allowing insurance companies to charge more, especially when concerning single driver situations.

3. Marital Status

Again, it appears as if a bias comes into play when auto insurance companies charge less premium for married drivers than their single counterparts. However, once again statistical analysis reveals married people are less a risk category because they seem to develop greater caution awareness when entering this particular relationship in their lives. This becomes an allowable factor under insurance law to use determining type and cost of coverage. Furthermore, insurance companies tend to offer discounts for multiple drivers on the same policy which, again, is a risk class allowed under auto insurance laws.

4. Driving History

This can be an all important decision making factor for many insurance companies when it comes to acceptance, coverage and premiums charged. Driving history – including state Motor Vehicle Reports – can provide insurance companies with a warehouse of information used to analyze the type of driver applying for protection. An applicant’s history of tickets received and accidents involved play heavily in determining a number of decisions when granting protection, the most influential being the premium charged.

5. Residence

Again, what may appear to be a bias is actually an analysis of risk factor when examining an insurance policy applicant’s place of residence. The higher a crime rate in a particular geographic area, the more likely a higher premium will be paid for auto insurance.

6. The Vehicle

The vehicle is taken into consideration when determination is made concerning actual make and model of an auto. The higher a value will demand higher premiums. Also, safety and anti-theft features present on a particular automobile direct the insurance company to create a policy offering specific protections at certain premiums.

7. Vehicle Usage

Insurance companies also take into consideration another risk factor allowed under local insurance laws and this is the vehicle usage. Amount of miles driven daily – and where these miles occur – play an important part toward designing the type of coverage as well as determining its cost.


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