Saving money on insurance is easy once you know what to do.
December 05, 2017
For individuals that have been using insurance of any kind, such as life, home or auto insurance, there is a good chance that you have already received a renewal bill in the mail saying that insurance rates have gone up or are going to increase. After getting the bill, has anyone wondered what causes insurance premiums to go up the way they do?
There may be a number of different reasons that cause insurance premium rates to go up. These factors may vary according to the type of insurance a person subscribes to, but some of these factors are influential on almost all types of insurance policies out there.
Six of the top most reasons why insurance premiums keep on increasing all the time are discussed below to give a general overview of the factors involved.
The location of the insured has a strong impact on the premium rates of the insurance policies they have been using. For example, city drivers tend to pay more than rural drivers. Why? It’s easy, it’s a numbers game, the more vehicles in an area the more chances of a driver being involved in an auto accident.
People living in the same locality normally share similar risk profiles. This happens due to a number of factors, such as cultural aversion, shared climate, unavailability of healthy food when applied to health policies, and other similar issues. That’s the reason why insurance premium rates for people residing at a certain location may be higher than those residing somewhere else.
When the insured person has a long history of filed claims, their insurance premiums tend to increase as there is a good chance that they might make another claim in the near future. Insurance providers usually look into the claims made by the insured person over the last seven years in order to figure out a pattern according to which they compute the appropriate amount of insurance premiums.
When applying for an insurance policy, the providers carry out an analysis of a credit score in addition to other things. This is done to determine the credit risk and to review someone’s ability of paying bills on time. In case where there is a low credit score on record, insurance premiums might increase. Therefore, it is strongly recommended to keep a consistent eye on the credit scores in order to avoid any unwanted situations to appear on a report.
AGE, MARITAL STATUS AND HEALTH
In reference to life insurance the premiums for younger people are much lower than those of older ones. However, if there is a need, people will still buy an insurance policy regardless of age or condition.
According to a general trend, married people tend to be healthier and live longer in comparison to single people. That’s the reason why the auto insurance premiums usually drop in rate after marriage.
Health obviously plays an important role on the health insurance premiums. Some of these insurance policies can require applicants to complete a through medical exam questionnaire before officially signing up. People with good health get lower insurance premiums in comparison to those with some sort of health issues.
LENGTH OF THE INSURANCE
The length of the insurance also causes an impact on the premium rates of an insurance policy. In addition to this, majority of the insurance providers usually charge more money to people who do not have any prior insurance policies on their record. For instance, most of the states in the US require vehicle operators to get insurance before driving a vehicle. Yet, some drivers take the risk and drive without no insurance anyways. In these cases where a driver doesn’t have any prior insurance, the auto insurers penalize them by charging additional money for a policy.
PROFIT AND LOSS OF THE COMPANY
Another deciding factor involved in insurance premium rates going up is the profit or loss experienced by the insurance company. In case the company suffered any financial loss, there is a good chance that it may impact the policy holder as well because their insurance premiums’ will be increased as a result of a carriers loss. Unfortunately, rates never seem to decrease when a company is profitable.
Now that we have identified the six reasons for premium increase, click “INS TIPS” to read seven effective and easy ways to reduce, YES, save money on insurance. These proven methods apply to a vast majority of insurance products.
Normally, insurance agents are hesitant to give all these secrets up front because they want to make the most commission off each person. However, Houston insurance agent, Frank Medina views things differently and enjoys giving back to his community. That is why he is giving away all this advice for FREE.
As an expert in the insurance industry, Frank has been featured in publications such as Insurance Journal, Property Casualty 360 and Best’s Review magazine. So, click on the link above, sign up and start using his proven techniques to save money.
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