The U.S. involvement in conflicts around the world is bound to bring about questions and feelings of uncertainty. The possibility of additional military action abroad has had a few clients ask us about its affect on insurance pricing. The simple answer is, military conflict has no to little effect on U.S. insurance prices, especially in the short-term.
Various factors can affect the cost of an insurance policy ranging from type of insurance and coverage to personal data, but military action abroad is not one of them.
If you’re planning on purchasing home, auto, business, life or other type of insurance coverage, here’s what you should know about insurance prices.
Factors that Determine Premium Costs
Insurance premiums are generally determined by four main factors: type of coverage, amount of coverage, your personal data and competition in your target area.
Type of Coverage
Insurance policies vary in the coverage they provide. When purchasing a policy, you decide what kind of coverage you desire. The more extensive your coverage, the more you can expect to pay on premium costs. By streamlining your coverage to obtain essential protection only, you can help reduce insurance costs.
Amount of Coverage
The amount of coverage you choose will also affect insurance costs. If you raise the limits on your policy to increase coverage, you’ll pay more for your premium. When contemplating how much coverage to choose on an insurance policy, consider the value of what you’re insuring. Your coverage should be sufficient to protect your goods in the event of theft or loss. At the same time, you don’t want to obtain more coverage than you need as this will raise the cost of your premium unnecessarily.
Another way of keeping insurance prices in line is to raise the deductible on your policy. The deductible is the amount you pay before your policy takes effect. A higher deductible will reduce your insurance costs.
Your Personal Data
Personal factors in your life such as age, health, occupation, financial standing, where you live and insurance history can have an effect on insurance costs. Your insurance rating criteria may vary from one insurer to another. Depending on your policy, some life factors may qualify you for reduced rates on your insurance premium. Low risk factors can also help reduce insurance costs.
Competition in Target Audience
The insurance industry is extremely competitive when it comes to pricing. Like any other business, insurers have distinct target audiences and cater their marketing strategies to reach individuals within that audience. Some insurers target retirees while others seek out singles or young families. The competition within a target audience can help drive insurance prices down temporarily or on a long-term basis as insurers strive to attract new clientele.
Some types of insurance, such as life insurance, allow you to lock in price rates by purchasing the policy when you’re young, enabling you to save on your premium long term.
Working with a reputable insurer is key to getting quality insurance coverage at reasonable costs. Contact the Hummel Group today for all your insurance needs.