What Impacts Your Insurance Premium Prices?

Piggy bank on calculator.There are many different factors out there that can affect both residential or commercial policies. Each policy has its own risk factors that individually impact the price of the policy: auto, life, boat, condo, and property insurance to name a few. Today we will be go over three popular insurance policies and what impacts your insurance premium prices with them, so you can better understand the price you are paying.

#1: Risks with Property Insurance:

When talking about property insurance, there are a few factors that come into play that can impact the price you pay. Some of these risks include:

  • Safety and Security: Having your property located in a high-crime area will likely increase your premium. Also, if your business conducts dangerous activities such as mining, construction, or storing toxic materials, these risks will also affect insurance costs.
  • Geography: Someone living on a hill may have slightly cheaper premiums than someone living in a valley which is at risk of flooding. Risks increase if you are located in an area that has high environmental risks such as flooding, hurricanes, and tornados. Also, checking your local laws and regulations regarding land value can help shed light on the cost.
  • Age of Building: The older the building, the higher the risk. Whether it’s the electrical wiring, asbestos, mold, or rotted wood, these can all have an effect on what you pay for your property insurance.

Knowing these risks can help you better budget for your business. Understanding the cost of your property insurance can also help determine what changes you can make to lower insurance costs for your business or your home.

#2: Risks with Auto Insurance

Let’s change gears and talk about auto insurance. When choosing auto insurance for your company or personal vehicles, you will most likely be asked these questions:

  • How often and how far do you drive?
  • Where do you live?
  • Have you had any accidents?
  • What car do you drive?

These are just a few of the questions that auto insurance agents use to narrow down the risks involved with your vehicle. Whether you live in a city with a high crime rate or have a 2-hour commute to work every day, it can be beneficial to have a perspective of an insurance agency to better understand the price you are paying.

#3: Risks with Life Insurance:

Similarly, with auto insurance, life insurance premiums can be affected by your driving record as well. More accidents mean higher premiums, so keep that record clean and enjoy the money you could save. However, the number one factor that impacts the price of life insurance policy is age. The younger and healthier the individual is, the less likely an insurance provide will have to write that check. Smoking, lifestyle, and family medical history are also likely to have an impact on premiums. By understanding and minimizing these various risks, you or your business can save in the long run.

We at TJ Woods hope you learned more about what influences the pricing of an insurance policy and its premiums. Contact one of our agents today if you have any questions and to learn how you can save on your insurance. We look forward to hearing from you.