There are people out there that are very good at math and financial theories/trends. Their job is to forecast the probability of certain events happening (natural disasters, economic trends etc.) and the costs incurred from these certain events. In the insurance industry, there are individuals who predict how likely customers are to file a claim. The higher the probability, the more the insurance industry can justify charging higher premiums.
But sometimes, just sometimes, the rate changes can be attributed to you specifically. Me?! Not pointing the finger at you, but here are some steps to keep those rising rates at bay.
Step One: Keep an Eye on Your Credit Score
Insurance companies sometimes look at your credit score just as lenders do because this estimates your risk and ability to repay a loan. Alas, it has been determined that people with low credit scores are more likely to get into accidents than people with high ones (I know, it’s all about probability and we’re not pointing fingers here). As a result, you could be charged more just because you have a lower credit score (ouch!). Just another reason to check and if needed, an opportunity to improve your score.
Step Two: Do Not Drive Like You’re Mario Andretti
We’re sure you’ve heard it from your mother but don’t drive recklessly! It makes sense that your driving record will affect your car insurance; it can also affect your life and health insurance rates as well. If you have had tickets for reckless driving and driving while under the influence, you can be considered higher risk (ouch again!). Also, if you have had more than a couple of speeding tickets in the past three (3) years you could be considered a “high-risk” person. This is real life, not Mario Kart; Slow down, stay safe and save money. You’re welcome.
Step Three: Investigate Before You Make A Move
Your location determines many things; certain weather/hazard trends, economic trends, population rates, and health factors such as local rate of obesity and health risks due to your specific ZIP/POSTAL code. It may be wise to do some digging before making a move that could affect your home, car, and life insurance. Looking a lovely cliffside home with pool? You may want to first get a few quotes before you make the big decision to change locations. Just sayin….
Step Four: Make Smart Claims
Accidents happen. Bad weather happens. As far as insurers are concerned, if you have made a claim in the past, the odds are that you will make another one. Gulp. And unfortunately for you the consumer, one bad apple can spoil the batch (don’t be that apple). There are people out there that have tried to take advantage of claims, so the insurance company will deter individuals from making numerous claims. The good news? The insurance company will likely only consider the last 5 years, so you have a chance to start again. A claim or two will not hang over your head for life like a criminal record.
Another thing to consider is will my rates automatically increase if I make a claim? The answer is not so easy because many things depend on this such as, who was at fault, what kind of a claim is it and it depends on the Insurer. Before making a car or home insurance claim, consider that making a claim may increase premiums in the future, and some insurers offer a discount with no claims. If the amount of your claim is only slightly higher than your deductible, consider if it’s worth it to pay for the loss yourself in the long run.
The Final Word
There you have it, some of the logic behind those insurance premiums. Although sometimes accidents are out of your hands, there are preventative measures and safety precautions for ensuring a lower premium. I hope this helped!
Curious as to what Insurely can do to help? We answer questions all day long because we’re happy to. But we also want our customers to be just as informed as we are before you hit the “BUY NOW” button.
Schedule a call with us today and book an appointment that best fits your schedule.
We’re good people like that.