Final answer:
Automobile insurance premiums are indeed influenced by the age and sex of the driver, usage of the car, and the driver's record, making the statement true. Insurance costs are tailored to reflect perceived risk factors and can vary significantly. High-risk individuals may experience higher premiums, affecting their decision to obtain insurance.
Step-by-step explanation:
True, automobile premiums are dependent on various factors including the age and sex of the operator, the use of the automobile, and the driving record of the operator. Younger, less experienced drivers generally pay higher premiums, while those with a history of accidents may be categorized as high-risk and also face higher insurance costs. Actuarially fair insurance rates are those that accurately reflect the risk associated with insuring a specific individual or group, leading to considerable variance in premiums based on assessed risk factors.
Understanding how age, gender, driving history, and vehicle use affect insurance premiums is crucial when considering the total cost of automobile ownership. Insurance serves as a protective measure against large out-of-pocket expenses in case of an accident and is a required aspect of owning a car in many places. Premiums can be paid monthly, quarterly, or biannually, and are an ongoing expense beyond the life of the vehicle loan. High-risk groups, such as young male drivers or people with chronic health conditions, may face steeper insurance costs, which could discourage them from purchasing insurance altogether.