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…