Insurance
companies set their rates based on how likely they believe a person is to file
a claim. If they believe you are more likely to file a claim, then your
insurance premium will be higher. If the insurance company believes you are
less likely to file a claim, then your insurance premium is lower. Some factors
insurance companies consider are obvious such as person’s driving record for
vehicle insurance and a person’s medical history for life and health insurance.
But
other factors might not be so obvious. Here are some factors which may make
your insurance premium higher.
Credit Score: Statistics show that people with lower credit
scores are more likely to get into vehicle accidents than people with higher
credit scores. Therefore, lower credit scores will likely get you a higher insurance
premium.
Household Claim
History: When looking for home insurance, insurers
have access to seven years’ worth of insurance claims for that particular house
through the Comprehensive Loss Underwriting Exchange (CLUE). Even if you didn’t
live at the home during the time the claims were made, your insurance premiums
can go up if there is a history of claims for that home. For example, if there
have been several mold-related claims made against the home, the chances are
higher there could be mold-related claims in the future.
Car’s
Horsepower: If your vehicle is a six-cylinder model,
rather than a four-cylinder model, it is likely your insurance premium will be
higher. The higher the horsepower of your vehicle, the higher the insurance
premium.
Driving Record: If you have had several driving violations,
you are a higher risk to cause vehicle accidents with other drivers. Therefore,
your insurance rates will be higher because you are a higher risk for the
insurance company. Generally, more than two moving violations in the last three
years will usually put a driver in a higher premium.
Co-Workers: If you receive your health insurance through
your job, then the premium is determined by the collective risk of the group.
Therefore, if you work with older people who are more susceptible to sickness,
your premium may be higher, regardless of how young and healthy you may
be. However, if you work with a lot of
healthy, young people, your premium will likely be lower, even if you are older
and more prone to illness.
Body Mass Index: Your weight also has a big impact on your
health insurance premiums since obesity puts any person at a greater risk for
injury, sickness and life threatening diseases. Generally, if you have a body
mass index (BMI) of 30 or greater, you will pay an average of 22 percent more
than someone with a BMI of 25. Even if you have lost weight, you may have to
prove you have kept the weight off for at least a year before your premiums
will go down.
Education Level: Statistically, insurance companies know there
is a connection between the level of education you have and the number of
insurance claims you make. In fact, people with higher educations, tend to make
fewer insurance claims. Therefore, with each level of education you complete,
make sure you let your insurance company know because it could lower your
premium. Similarly, your job itself could lower your insurance premium or make
it higher. People in careers such as corporate executive, attorneys or teachers
tend to receive lower premiums, while blue collar workers tend to have higher insurance
premiums because they tend to make more insurance claims.
Family Health
History: Even if you have no history of sickness or
illness, your insurance premiums may be higher if your parents or siblings died
or even were diagnosed with heart disease or cancer before age 60. That kind of
family history makes you a higher risk to also have that illness making your
medical costs higher.
Zip Code: Where you live can also impact your insurance
premium. If you live in an area where a lot of insurance claims are made, even
if you never made one yourself, your insurance premium will be higher.
Likewise, if you live in an area with a low number of insurance claims, then
your premium will likely be lower. Insurance companies study all the statistics
possible to find out what kind of risk you are.
Hobbies: Insurance companies also want to know about
your hobbies. If you are one who enjoys adrenaline or adventure sports such as
skydiving, bull riding or race car driving, then your insurance rates will
generally be higher. Also, if you are planning a lot of international travel,
especially to risky areas such as Afghanistan, then you could also see higher
insurance premiums.
If you plan on drinking, do not drive. Protect yourself and
others as well. 
