State Farm Auto Insurance Practice Test

What might lead to a surcharge on an auto insurance premium?

1. Receiving a good driver discount

2. At-fault accidents

3. Paying on time

4. Completing a driver safety course

The correct answer is: At-fault accidents

A surcharge on an auto insurance premium typically occurs when a driver is deemed higher risk due to certain behaviors or incidents. At-fault accidents are a significant factor that can lead to such surcharges. When a driver is involved in an accident where they're determined to be responsible, it indicates to insurance companies that there is an increased likelihood of future claims, thus leading to higher premiums as a form of risk assessment. Other factors, such as receiving defensive driving discounts or paying your premium on time, actually work in favor of the driver by potentially lowering their insurance costs. Similarly, completing a driver safety course is often rewarded with discounts, enhancing the driver’s profile as a lower-risk individual. In contrast, the history of at-fault accidents contributes to a negative risk assessment, justifying a surcharge on the policy.