Risk
Risk is that element of the insurance business model that is routinely assessed by the mathematical and statistical formulas inherent to the discipline of actuarial science. Actuaries (professionals in the field of risk assessment), apply these principles to given life events or activities in order to determine the probability with which these events are likely to occur. Insurance companies use this assessment of risk in the process of underwriting an insurance policy. In other words, the company determines what events or activities to cover based on the risk model and set their premiums or insurance policy fees accordingly.In the instance of automobile insurance, a variety of factors may influence the degree of risk assessed for a given policy holder including driving record (such as number of tickets issued), age and condition of the vehicle, and number of previous accidents for which claims have been filed. When the risk factors for a given driver increase, their insurance premiums increase as well. More Glossary Terms Explained here
Every insurance company has their own rates, but it is to be noted that it is not just companies that determine.
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