How Insurance Premiums are Determined
If you are a woman, you probably will pay more than a man for health insurance coverage in the open marketplace. If you are a man, you probably will pay more over your lifetime for auto insurance. Seniors usually pay more for car insurance than when they were middle-aged.
This may seem like discrimination, but you probably can understand the reasoning behind some of these pricing decisions. Some personal factors that affect insurance premium pricing include:
Reduce Your Premiums
You cannot control some insurance pricing factors, but there are some that you can (and should) to help lower your premiums. Kiplinger reports some of the following factors that can raise your premiums.
Your Credit Score
- Some states don’t let insurance companies use credit scores for setting premium rates, but more often people with lower credit scores get charged higher rates.
- A car with more horsepower can be more expensive to insure. Raising the deductible on an older car may help lower your premiums.
Your Driving Record
- A higher number of incidents can increase your car and life insurance costs. Controlling your speed will, over the long run, help reduce your premiums. And never drink and drive. A conviction for driving under the influence (DUI) or driving while impaired (DWI) can eliminate you from regular-priced insurance markets for several years. Ditto for driving and texting.
- With life insurance in particular, your body mass index (a measure of body fat based on your weight and height) may factor into your premiums. Calculate your BMI using this calculator from the U. S. Department of Health and Human Services.
Your Education Level
- In general, each level you achieve in education can help lower your premiums.
Your Hobbies and Travel
- If you take on risky hobbies or if you travel to risky areas around the globe, you may not get preferential rates for life insurance.
Ultimately, talk to your insurance agent. Simply asking for a discount or choosing a higher deductible can save you money.