People I meet from out of town often ask me, “What are the car insurance rates like in Nashville?” “How do home insurance rates in Tennessee compare?”

They’re funny questions, honestly, because I can’t answer them. At least not accurately.

If you want numbers that mean anything, we’d need to get a little deeper, and talk about insurance rates based on risk levels. Which is something worth talking about, if you’re shopping for insurance in Nashville. A lot of people don’t realize it, but if you’re considered a “preferred risk,” you have a serious bargaining chip that you can and should be making smart use of.   

Different categories of risk

If you don’t realize where you stand and what’s available to you, odds are you end up doing the insurance-shopping equivalent of picking low-hanging fruit, even if better, shinier options might be right there, ready to be picked.

So let’s make that stuff a little clearer, and break down the basic idea of risk categories.

If you’re shopping for car insurance, home insurance, life insurance or another kind of coverage, providers will tally up a long list of factors, like your driving, coverage and claims history. That data gets crunched until you fit comfortably into one of three risk categories:

• high/substandard risk
• standard risk
• or preferred risk

Standard risk

The vast majority of clients fall into the standard risk category — it’s the comfortable middle-ground, so your rates will come the closest to the Nashville average. (You’re probably most familiar with the insurance carriers that focus on this segment, because they advertise heavily.)

High risk

Someone who’s considered high or substandard risk will have the highest premiums, and the smallest list of provider options. If you’ve had numerous tickets, at-fault collisions, DUIs or a long list of insurance claims, you’re more likely to land here. Carriers that target high-risk customers advertise heavily too, so you’re likely familiar with a few names. What you may not realize: A risk pool that’s more heavily weighted with high-risk customers usually makes rates higher for everyone.

Preferred risk

Preferred risk clients, on the other hand, experience the opposite. Insurance companies want your business, so many are willing to appeal to you with better rates.

Some carriers focus specifically on these “better risks,” too. Even if they don’t say so overtly, their pricing models are so dynamic that rates are extremely good for the low-risk applicant, extremely high for the higher-risk applicant. You end up with a self-selected, very low-risk pool, and even lower rates for clients that fall into whatever they’ve determined their preferred risk to be.

I point this out because, while these carriers are often household names, they’re usually less likely to be on TV 24/7, more likely to rely on independent agents like me to represent them to their customers. If you’re on the lower-risk scale and you just stick with the carrier whose ads hit you the loudest, chances are good that you can do better. Maybe a lot better.

What makes someone a ‘preferred risk’?

Risk, to insurers, is pretty much how likely you are to make claims. If you’re seen as less likely to make claims: “preferred risk.” A few specifics that might land you in this coveted space:

— you have a clean driving record (say, fewer than three traffic incidents in the last five years)

— you’ve had consistent insurance coverage with few or no claims

— you have a college or graduate degree

— your credit score is good, very good, or excellent

— you’re around the middle, age-wise

— you live in a densely populated or trendy neighborhood

— you own one or more rental properties

— your commute is less than 10 miles

— you have fewer drivers using your vehicle

There’s a lot more — things that point to responsibility and, well, less risky behavior. I’d be happy to chat with you about your specifics, and help you get a sense of where you stand.

How much good does ‘preferred risk’ status do me?

Quick answer: usually, a lot of good.

I routinely see life insurance and car insurance rates cut by as much as half between standard and preferred risk clients.

Another good thing to know: Since insurance companies want “preferred risk” clients, it’s smart to periodically shop for new coverage. Many insurers are willing to compete for your business, so even if you already have pretty decent rates, you might do even better. You just need to seek out the possibilities.

I’m more than happy to do the legwork of exploring and comparing different insurance options for you. Call or email Tucker Coverage, tell me about what you’re looking for, and I’ll start working.

Another easy way to start the process: Get an online insurance quote here.

Anything else I can help with, related to insurance in Nashville? I always welcome your feedback. Reach out here.