Stephen B. Groton
Preferred Auto Insurance is a category of auto insurance designed for people who are least likely to have an accident or a claim and who want more than just the minimum insurance required by the state or the finance company.
When determing how much the customer will pay for insurance, the company looks the customer's motor vehicle record, years of driving experience, location address, how many miles the car is driven, how much the car costs, marital status, etc. Insurance companies have mountains of statistics that have been accumulated over the years that help them predict what combination of factors are less likely to have a loss and what factors are more likely to have a loss. For instance, it has been demonstrated over the years that people in rural areas are less likely to have an accident than those in congested urban areas. The less likely you are to have an accident, according to the experience of the insurance company, the less you have to pay for your insurance. A married couple who own two American-made minivans, own a home, drive moderately, have no tickets or accidents and have had insurance for years without a cancellation are considered Preferred clients. They are preferred because they are, statistically, less likely to have an accident.
There may be additional discounts for professional occupations such as doctors, lawyers, teachers, police officers, etc. Discounts may be available if you insure your house with the same company as your cars or have other forms of insurance with the same company such as motorcycle, boat, RV, etc.
Other categories of risk are Standard and Non-Standard, also known as High Risk. The preferred client could be characterized by the fact that they primarily interested in the coverage
and secondarily interested in the price. They are generally concerned about having adequate amounts of coverage, for instance, high limits of liability in case they are at fault in an accident. Being more interested in the coverage than the price, they generally maintain continuous insurance for years without interruption. The Standard Risk may have a ticket or two, an accident, maybe, and is more likely to be concerned with cost first and coverage second. Most often they will carry uninsured motorist coverage but may be willing to insure with a company that offers a better price but less service or coverage than a more preferred company would. And the Non-Standard is characterized by carrying the very minimum coverage possible at the lowest price regardless of the quality of the company and service. Usually the non-standard or high risk client will not carry uninsured motorist coverage. This category would contain drivers with major violations, multiple tickets, youthful operators with high performance cars, suspended license, SR22 requirement or just want the least insurance for the lowest price.