What you can and can’t control
That magic rate – how do insurance companies determine your home and auto rates? If you are new customer, it’s not like they actually know you; you provide the company a few pieces of information and the next thing you know, your rate is determined. But what actually affects that rate? How does the insurance company know they have all the information?
When it comes to insurance rates, whether home, auto or otherwise, there are factors you can and cannot control. Knowing what goes into the insurance rate equation can help you work on lowering yours.
There are many uncontrollable factors that go into your home and auto insurance rates – no matter what you do, you can’t change it.
- Gender: Younger male drivers typically have higher insurance rates than female drivers.
- Age or driving experience: The less driving experience you have, the higher the chance you’ll have an accident, so the rates are higher for newer and younger drivers.
- Marital status: When you’re ready, you’re ready. Statistics show that married couples have less accidents than single drivers. Until then, you’ll have higher insurance rates.
- Weather: If Mother Nature has a tendency to visit your area with wind, hail, tornados, lightning or flooding on a regular basis, be prepared for higher rates.
What You Can Do
There are things you can control – actions and upgrades you can do to help lower your home or auto insurance rates. Knowing your insurance score and working to lower it will help alleviate most insurance policies; ninety percent of insurance companies will use your insurance score as a factor in your rates. And there’s the obvious combining of your insurance policies with one carrier to earn multi-policy discounts. A few others include:
|Driving history: This is the big one. The better you drive, the lower your rates will be! You can work to improve this one, even if you have a poor past history.|
How often, how far you drive: The more you’re on the road, the higher likelihood you have of being in an accident.
Age of car: Let’s be real – it costs more to fix your new car than it does your old car from high school.
Don’t text and drive: This will help keep your rates low by avoiding accidents resulting from distracted driving.
|Remodeling: While updating parts of your house can lower your rate, be aware some remodels, like additions or a home office, may actually increase your rate.|
Install home security: Security lights and video cameras will not only help you sleep better at night, but it will help lower your rates.
Swimming pool, hot tub, trampolines: Though fun, each of these can add liability and increase your insurance rates. Many companies won’t even insure you if you have a trampoline.
Location: When you move, look at your future neighborhood – how close are you to the local fire department or fire hydrants? Your proximity will help decrease rates.
There are many factors that go into deciding your insurance rates. The best choice is to work with a company like Rural Mutual Insurance, which has local agents and underwriters who live in your communities – they know the ins and outs that may affect your rates and can point out actions or upgrades you may not have known about. Since they are local, they’re able to come and review all this with you in person, to get to know you a little bit better and to make sure you’re getting the best rate possible.