Different Coverages For Private Passenger Autos  

The risk profile of a private-passenger auto insurance policyholder is typically divided into three categories: preferred, standard, and nonstandard. Preferred policyholders can be the least risky and most desirable because they are the least likely to face a claim. Standard drivers are average in the sense that they do not have a perfect driving record but do not have many blemishes. The nonstandard profile, associated with the riskiest drivers, is at the other end of the spectrum. Risky drivers must pay the highest premiums and, in some cases, may not be able to obtain insurance because they are the most likely to be involved in an accident.

Like in most states, in Lawrenceville,  it is recommended to have coverage for Private Passenger Autos where there are similar coverage plans as follows: 

• Auto Liability Coverage

• Uninsured and Underinsured Motorist Coverage

• Comprehensive Coverage

• Collision Coverage

• Medical Payments Coverage

• Personal Injury Protection.

Each of the three risk profiles is likely to have policyholders at insurance companies. They want to balance the low premiums (and thus low revenue) associated with preferred profile drivers and the higher premiums associated with riskier drivers. The goal is to limit the risk across a portfolio of policies concerning the total amount of premiums collected.

Special Considerations  

Usually, drivers are highly motivated to improve or protect their risk profile. Here are two approaches to consider.

Maintain the best driving record possible.

Avoiding reckless driving, violations, and significant damage is the first step toward a lower risk profile. Drivers can also take classes to improve their driving skills, specifically defensive driving skills. This will demonstrate to your insurer that you are dedicated to safe driving.

Try to Avoid Filing Claims.

Filled claims accumulate a claims history, and most companies would prefer not to have policyholders who file claims frequently. If you must file a claim, make it for significant damages and losses.

Key Takeaways

• Private-passenger auto insurance policyholder risk profile quantifies risk that an insurance company will assume by insuring a policyholder.
• There are three types of profiles in order of least risk to most significant risk: preferred, standard, and nonstandard.
• In general, insurance companies will have policyholders from all three profiles, balancing low-risk policyholders and the low revenues they generate with high-risk policyholders and the high revenues they generate.