How Much Does Insurance Cost   no comments

Posted at 12:00 am in Different types of insurance

Have you ever wondered how your insurance company comes up with the price it charges you for your insurance policy? Maybe you are curious as to why one type of insurance is priced higher than another, or why your friend pays less than you for the exact same car insurance policy. Here is a look at some factors that go into pricing your insurance policy.

Risk Of Claim

How likely are you to file a claim? The higher a risk you pose, the more you are going to pay for your insurance policy. Factors that make you a bigger risk can be age, credit score and whether or not you have ever filed a claim in the past.

How Much Would Have To Be Paid Out

The insurance company is going to pay for damages, but the more they cost, the more they will charge you to help cover the costs. For example, a newer car may cost more to insure because the parts may be more expensive to acquire should they need to be replaced. On the other hand, your renters insurance policy is going to be cheaper because the cost of goods is generally lower and claims may not be made as often.

Deductible

If you want to lower the price of your insurance, consider raising the amount of your deductible. The deductible is the amount that you have to cover before insurance kicks in. The less they have to pay, the less you have to pay. A 1,000 deductible on damage is going to cost less than a 500 deductible because you are shouldering more of the burden.

Discounts

There are many discounts that a provider may offer. From a good student discount, to a no-claims discount, there are many ways to lower your insurance cost. You can always look into each specific provider to see what they offer and if it will effect the cost of your insurance. You can find out about these discount when you are comparing insurance quotes online.

When it comes to insurance, the bottom line is that you will pay more if the insurance company has to pay more, or if you pose a risk to possibly cost more. If you can lower your risk, and shoulder more of the cost, you can lower your coverage costs. However, just make sure you are getting the proper coverage regardless of the cost.

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