What Factors Influence My Insurance Premium?

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Variables that can influence your individual rate include: where you live (urban, suburban, rural), age, and gender to name a few.

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There are a variety of factors that influence the premium or amount of money charged for insurance coverage.  Rates, or how much an insurance company charges for a certain amount of coverage, is based on the amount of risk that the policyholder and/or his/her property represents.  So, a policyholder that poses less risk, statistically speaking, is charged a lower rate.  Conversely, a policyholder who poses more risk, statistically speaking, is charged a higher rate.  All rates must be approved by each state’s department of insurance, ensuring that the rate being charged is fair.

So, what factors can influence your individual rate?  Here’s a list of a few that can factor in, but not all variables are used for all coverage.  So, depending on the state you live in and the insurance rules for that state, as well as, what you’re insuring, factors can include:

• Where you live (urban, suburban, rural)
• Your age
• Your gender
• Your marital status
• Credit score
• Vehicle use for auto
• Driving record for auto
• Years of driving experience for auto
• Make and model of your vehicle for auto
• Construction type for property
• Value of property

As a reminder, there are some behaviors within your control that can also influence your insurance premium.  Examples of those things that make you a “lower” risk are better maintenance/improvements of your property.  Those things that can make you a “higher” risk can include prior loss history, a trampoline on your property, or ownership of particular dog breeds.  

Randy Hay 
Manager of Actuarial Services