Preferred Auto

What Does Preferred Auto Mean?

Preferred auto insurance is a type of auto insurance offered by insurers to drivers who have had no accidents or very few accidents. It is termed “preferred auto” because these drivers are considered “preferred” by auto insurance companies. As a result, these favored policyholders typically pay the lowest premiums compared to other categories of policyholders offered by the insurance company.

Insuranceopedia Explains Preferred Auto

Drivers who present a low risk of filing a claim are highly desirable to insurance companies. To increase their chances of qualifying for preferred auto insurance, drivers can adhere to traffic laws, drive responsibly, and avoid accidents. Conversely, drivers with a history of frequent accidents may be charged higher premiums for auto insurance. Since they represent a greater risk, they are likely to incur higher costs for insurance companies over time.