Preferred Auto Insurance: What Is It?

Q: I’ve seen it on a few different websites, but I don’t know what “preferred auto insurance” is.¬¨‚Ć Does it mean I pay less?

AIS Answer: When insurance companies use the term “Preferred” generally they are referring to the type of customer that qualifies as a lower risk or preferred policyholder.

For example. If your driving record is not so good, or you’re considered young, or too old, you could possibly be labeled as a “high risk” driver. Of course there are many other factors that go into assessing a person as “high risk”, but if that label is attached you’re likely going to pay more for car insurance than someone that insurance companies consider “preferred”, or low risk.

Some insurance companies even offer special “Safe driver” discounts to preferred customers. However, it’s unclear at which point you’re considered a preferred driver. You could simply ask an insurance agent if they know of companies that offer preferred insurance programs, chances are many of the major insurance companies do.

Whether you feel that you qualify for an insurance company’s preferred car insurance program or not, it’s still very smart to shop around and find the¬¨‚Ć right plan for you. Remember to always ask about possible insurance discounts.