Quotes in Insurance and What Affects Them
By Charles Hopkins
Published 10/26/2007 | Insurance
Many things in one's life cost money. Buying a home, staying current in one's profession, purchasing an appliance or a car, these all require money and therefore require an investment in one's effort and time. People who have worked hard to acquire something naturally want to protect it and so purchase insurance to prepare for the chance that misfortune might fall on their health or possessions.
What Affects Insurance Quotes
Take the car, for instance. It's an important - some would say indispensable - part of modern life. Without it, most people could not achieve the mobility necessary in today's world. For them, it is a symbol of independence. Small wonder hen that an entire part of man's culture has grown up around it. People have made odes dedicated to it, sung about how they drove all night to be with a loved one, made models and other merchandise, and spent billions and billions on the factories to make it and the infrastructure necessary to support it. It's no surprise that auto insurance companies make billions off the fact that people want to protect their investment in this metal-and-rubber wonder. The same is true in many other fields - health insurance, life insurance, home insurance, pet insurance, travel insurance.
Insurance premiums are not the same for all people, however. Those deemed as higher risks will naturally have to pay more for their coverage than those who rank lower. The actuarial specialists who calculate the premiums base their results on several factors. To continue with the car insurance example, these might include:
1. Location If you live in an urban area, you might be assessed as a greater risk to the insurer. This is due to the greater risk of accidents and theft and the greater risk that the company will have to pay out.
2. Type of vehicle Different types of motor vehicles are placed in different insurance categories. A beat-up old Honda won't be as expensive to insure as a Porsche Boxster.
3. Driver Newly-certified drivers may be assessed as greater risks due to inexperience and therefore given greater quotes. Ditto on any medical conditions.
4. Occupation A person's job also affects their insurance. A low-level employee will generally pay a lesser amount than a senior executive.
Other considerations may also apply. If you're willing to spend a bigger amount on repairs in case of a car accident, for example, you could indicate this to the insurer, and in consideration of this, they could lower the quote they give you.
A number of factors also drive the cost of insurance and in consequence the quotes insurance firms will give you. These include, but are not limited to:
1. Stock investments To have enough money in case of a large payout, insurance companies invest their funds. This means that when markets fall, insurance costs go up.
2. Litigation People are more litigious these days. They are more likely to claim, and the amounts paid out nowadays are higher than they used to be. This burden also includes third parties such as entities like hospitals.