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Paragon Independent Insurance Agencies, Inc

6305 Preston Road #1000
Plano, TX 75024

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How do auto insurance companies assess my risk?

Insurance companies are all about assessing risk. When you purchase car insurance, the company considers various factors in determining how much of a risk you pose and what your premium should be. Paragon Independent Insurance Agency explains how auto insurance companies assess risk and why it’s crucial for Plano, TX, drivers to understand this process. 

Factors Used to Assess Risk 

Auto insurance companies use two main factors when they evaluate an applicant’s risk level: personal information and driving history. Personal information includes age, gender, marital status, credit score, residential address (location), and occupation. Driving history includes accidents or moving violations reported to the Department of Motor Vehicles (DMV). Texas also allows insurers to consider prior insurance coverage when assessing risk levels. 

These factors are so important because they give the insurer insight into how likely you are to file a claim in the future. For instance, younger drivers tend to be more prone to accidents due to their lack of road experience—which is reflected in higher premiums. Similarly, individuals with bad credit scores may also be deemed high-risk applicants since studies have shown that people with low credit scores tend to file more claims than those with good ones. 

Contact Us Today

Auto insurance companies use various factors when determining an applicant’s risk level—from personal information and driving history to discounts or special programs that can help lower premium costs. Understanding this assessment process can help Plano, TX residents get the best possible coverage at the most affordable rate from their chosen insurer. Contact Paragon Independent Insurance Agency today to learn more about auto insurance policies and how they can protect you on the road! We’re ready to answer all your questions and find the right policy for your needs!



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