Everyone wants to save money. And as the cost of living increases, scouting out deals is becoming like a second (or third, or fourth) job for some. So when it comes to insurance, how can you get the most bang for your buck? What determines the price of insurance, anyway?
Well, it first depends on the type of insurance—e.g., homeowner, auto, life, or business. Each one has its own price-determining factors and ways to cut the cost of annual or monthly premiums. But there are a few common denominators among them all:
Claim history (and likelihood of future claims, aka “personal risk”)
Amount of coverage needed
Deductibles
Replacement cost
Location (of home or business)
Credit score
Other factors are not universal but can still overlap. For example, driving history, gender, and age affect both auto and life insurance premiums. Meanwhile, vehicle safety and company procedures will impact auto and business insurance pricing.
One thing that does not determine price: your agent or agency. Insurance carriers (such as Westfield, Safeco) set cost parameters. However, your agent has the required expertise to advise on how to work within those parameters.
But that’s just scratching the surface. As a homeowner, car owner, life insurance policy holder, and/or business owner, you’ll want to dig deeper. Check out our pricing series to get to the bottom of what influences how much you pay for insurance.
