• Submitted By: xuen
  • Date Submitted: 03/30/2016 9:11 AM
  • Category: Book Reports
  • Words: 2111
  • Page: 9

We collect data based on factors that influence auto insurance premiums such as gender, age, address, race, model of car, years, type of coverage, sum insured, and no claim discount. These factors influence auto insurance premiums as below:

a. Gender
Supported by many years’ worth of data, males were proved to drive more recklessly. Males also have more chance to drive which leads to a higher chance of being involved in an accident. 

Statistically, young men usually have to pay higher insurance rates than young women since more male teenagers have accidents than female teenagers. However, older women are suggested to be involved in more minor accidents than older men. Thus, when become older, the men could get better rates than women.

b. Age
Based on statistics, many insurance companies use age to determine the car insurance rates as age is one of the most influential statistics. Younger drivers in the age range between16 and 23 are at higher risk for accidents while drivers between 40 and 50 years old have proved to be the safest drivers.

c. Addresses
Generally, drivers who live in urban areas need to pay more for car insurance than those who live in rural areas because urban areas tend to have higher rates of accidents, vandalism and theft compared to rural areas. Since there are more big cities in West Malaysia, the premium in West Malaysia could be higher than the premium in East Malaysia, which has more small cities and rural areas. In addition, due to the high unemployment rates, there are quite a number of uninsured drivers in many urban areas as they cannot afford to insure their cars.

d. Age of the Car
Although the repair costs of an older vehicle are similar to the costs of a newer vehicle, it is more likely that the owner will choose to discard an older car instead of repairing it after an accident. This is because the cost of repairing an older car can often be higher than the vehicle’s entire worth. Since the cost to...

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