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Abstract
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Introduction
According to the Center for Disease Control (CDC), six million car accidents resulting in two million injuries are reported annually (2019). Statistically, for every person in the United States, 327 million as of 2018 (The World Bank, n.d.), nearly four (3.8) people are more than likely to be involved in a traffic accident every minute, whether they are behind the wheel or not, and the probability of that accident being a fatality is close to four persons (3.65) every hour (NHTSA National Center for Statistics and Analysis, 2019) due to alcohol (40%), speed (30%), or recklessness (33%) (CDC. 2019).
Whether speed is a contributing factor, or other factors like drunk driving, distraction, or sleep deprivation, one point that remains car accidents are on the rise, especially in areas of high congestion (location) which is why many insurance agencies are adopting a pay-as-you-drive (PAYD), incentivizing loyal while maintaining market competition (Ayuso, Guillen, & Nielsen, 2016, p.4).
Purpose (Rationale)
The purpose of this paper was to bring to light, from a statistics standpoint, several factors affecting auto insurance - age of drivers, miles (driven), total crashes, and reported injuries concerning fatalities - probability, the likelihood that something will happen (LindMarchal-Wathen, (2018). The hypothesis could then derive if age and mileage, or both are legitimate variables in determining risk, and overall exposure to higher insurance premiums.
Data Collection
Research and data were found using various available databases online from the AAA Foundation.org with supplemental information from Center for Disease Control and Prevention (CDC), National Association of Insurance Commissioners (NAIC), the National Highway Traffic Safety Administration (NHTSA), and the U.S. Department of Health and Human Services National Library of Medicine. The raw data was then compiled using Minitab to generate a descriptive statistical summary report, charts, and graphs.
Factors
Insurance underwriting is the method used in pricing to assess risk leading to an assigned rating based on personal information and claims history, more specific, the severity of the accident's history (NAIC, 2019). These are the main possible factors that can affect the amount and price of insurance...
Language: en |