Private-Passenger Auto Insurance Policyholder Risk Profile

Definition

  • Generally, drivers are sorted into three risk profiles in order of lowest to highest risk: preferred, standard, or nonstandard (also known as "substandard" or "high risk"). Auto insurance companies use a client's risk profile, and by extension the client's driving record, to determine their insurance premiums. Preferred drivers have near spotless records and present a low risk; they will have low insurance premiums. Nonstandard drivers may have numerous traffic violations and/or collisions and present a high risk; they will have high insurance premiums. Standard drivers have an average driving record and will have insurance premiums valued somewhere between those paid by preferred and nonstandard drivers.

Synonyms
driver risk profile, auto insurance risk profile, policyholder risk profile, driver risk class

Related Terms and Acronyms

  • Automobile Liability Insurance Definition,
    • Insurance coverage for damages caused in traffic collisions.
  • Collision Insurance Definition,
    • Auto insurance that provides coverage for damages to the policyholder's vehicle in the event that the policyholder is at fault in a traffic collision.
  • Comprehensive Insurance Definition,
    • Auto insurance that covers damages not resulting from a collision, and for vehicle theft.
  • High Risk Auto Insurance Definition,
    • Auto insurance for drivers with an increased risk of collisions.
  • Insurance Score Definition,
    • A score used by those in the insurance industry to determine how likely a claim will need to be paid out for an individual or entity.
  • Preferred Auto Definition,
    • Auto insurance for those with better driving records.
  • Risk Class Definition,
    • A number of people who are grouped together because they pose similar levels of risk to an insurance company.
  • Standard Automotive Insurance Definition,
    • Auto insurance that covers those with average driving records.
  • Substandard Insurance Definition,
    • Insurance for those who are ineligible for standard insurance due to higher risk profiles.
  • Underinsured Motorist Coverage Definition,
    • Auto insurance that covers damages when the other driver in a collision is at fault but does not have sufficient insurance coverage.
  • Uninsured Motorist Coverage Definition,
    • Auto insurance that covers collision damages caused by a driver without auto insurance.
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