Have you ever wondered if car insurance companies are fair when determining their car insurance policy rates? Many would say that some factors that affect the premiums seem discriminatory. For example, you have a policy for the same vehicles, and the users picked the same add-ons. However, one of the users is only 22 years old, and the other one is 52 years old and without major traffic offenses behind them. The insurance rates for the younger user will be higher, but why is that the case? Here is a thorough analysis of the potentially discriminating factors used when determining car insurance policies.
Do Younger People Need to Pay Higher Premium?
The answer is yes, but that is not because the insurance companies are discriminating. When it comes to road accidents in Malaysia, the statistics show that drivers younger than 25 are most prone to road rage, driving irresponsibly, and causing accidents. Unfortunately, the reports indicate that most deaths are noticed in this age group. Since these statistics show that young drivers are at high risk on the roads, the insurance companies charge them more. As time passes, they can prove themselves by not filing claims or committing traffic offenses. A clean driving record will help them to lower the car insurance policy rates over the years.
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Do Men Have to Pay More for an Insurance Policy Than Females?
Yes, and the research also supports this decision. The statistics show that males cause more accidents than females. Although that might be because you will find more male drivers, it doesn’t change the fact they are a higher risk.
How Can a Car Make and Model Affect the Insurance Rates?
If we are talking about car types, owners of both old and new vehicles could have reasons to complain. When it comes to new cars, the repairs cost more, which is why the insurance company could increase the cost. However, extra safety features found on new vehicles might lower the rates. You won’t find those safety features on old cars, which could cause a rate increase for their owners. Ultimately, this is only one of the factors that affect the car insurance policy cost, and the company will analyze all relevant criteria when setting the price.
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Can Where You live Change the Price of Your Insurance Policy?
Yes, your geographical location will affect the insurance rates in multiple ways. Those include:
- Crime rates – if the crime is common in your area, that increases the risk of the vehicle getting stolen.
- City driving – if you live or plan on driving through congested roads and busy streets frequently, that could increase the price. Those living in rural states will have somewhat better rates since they are a lower accident risk.
Final Thoughts – It Is Not About Discrimination
Ultimately, we feel the need to mention that car insurance policy is not about discrimination. You can see that because no insurance company will ever change the policy price based on your religion or race. The purpose of assessing various factors when determining your insurance rates is to protect the insurance company from getting into a bad deal. The criteria used to assess a particular user’s situation and the level of risk involved. If the estimated risk is higher, the company will increase its rates. However, insurance agencies also offer a variety of benefits, especially for their loyal users. That is why you should aim to find the best deal possible and enjoy the fact that you found the most favorable policy available.
