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Three Statistical Factors that Affect Your Car Insurance Rates

Three Statistical Factors that Affect Your Car Insurance Rates

Insurance companies use many factors to determine the premium rate specific to each client. Persons with expensive possessions, cars, or businesses may be charged higher than others. Insurance providers also consider statistics to set prices; that is, they study facts and figures and use them to determine their rates.

Here are some of the car insurance industry statistics that are likely to affect your rate.

1. Credit Score

Although it may seem unfair that persons with a low credit score are charged higher coverage rates than others, statistics have shown that this group of people are more likely to file claims than those with good credit. People with high credit scores may choose to pay for easy repairs or minor damages, while the low credit group is unlikely to have extra income for such. The provider considers the pros and cons for both groups of people to make correct predictions and estimations.

2. Age

The insurer will consider the age of the person before deciding on the rate for the automobile. Reports have shown that teenagers are at a significantly higher risk of getting involved in car accidents compared to adults; hence, your provider may consider if you have teenage drivers at home. Intoxication, texting and driving, speeding, and tailgating are some of the dangerous behaviors that are common among teenagers, increasing the likelihood of car crashes.

Let’s take a look at the statistics on teenage drivers:

Per mileage, persons aged 16 to 19 are three times more likely than those aged 20 and above to have fatal car accidents.

The percentage of male teenagers involved in auto accidents is significantly higher than females.

Also, because there is no driving history to consider when starting an auto coverage plan for a teenager, the provider makes estimations based on statistical data.

For elderly drivers, age is not the direct cause for an increase in risk but age-related health conditions such as stiff joints and vision problems are red flags for insurance companies. Generally, it is advisable to stop driving at age 80 because there is a likelihood of sudden loss of motor skills.

3. Location

Some states or cities are safer to drive in than others. Insurance companies also consider geographical locations when deciding on rates. Accidents are higher in cities or urban areas than in rural areas due to the number of drivers and the commotion caused by heavy traffic. Congestion is one of the leading causes of car crashes, and small towners do not suffer regular traffic patterns compared to city people. The traffic fatality rate in America is 12.4 deaths per 100,000 inhabitants. Deducing from the statistical reports, persons living in the populous zones will tend to pay more in insurance than those living in lesser populated areas.

Note that your provider relies on the general statistics regarding your age, sex, credit score, driving frequency, and geographical location before setting the cost of auto insurance. However, you can make use of the available discounts for good driving behavior to keep your premium low.

Willing to learn more? Contact our car insurance experts at James Page Insurance today! We will be happy to assist you.

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Term vs. Whole Life Insurance: Which One is Better?

Term vs. Whole Life Insurance Which One is BetterTerm vs. Whole Life Insurance

Term life insurance is coverage for a specific sum of years where the benefits are awarded to the beneficiaries if the insured dies within the coverage period. Whole life insurance is protection for benefits to be paid to the beneficiaries at any time the insured dies. Both coverages have their pros and cons, but the former is significantly cheaper than the latter. Whole life premiums can cost five to 15 times more than term policies with similar benefits.

Now, we’ll compare Term life vs Whole life insurance before deciding on which is the better option for you.

1. Risks Involved and Resultant Cost

Term insurance can be a better option than life because it costs significantly less. The difference in rate is due to the low probability of claiming within this period, which is low-risk for the insurance company. Investing in term coverage is a high-risk decision for the insured person because there is no guarantee that death will come before the plan expires. The risk may be reduced where the client is battling a terminal illness like cancer with low life expectancy.

Whole life insurance is a safer investment because it builds up cash value. In contrast, term life insurance has no cash value because it has an expiration date. There are no restrictions for whole coverage. It is a full-ride investment that remains valuable until you die. You may choose to switch a term policy to whole if it expires while you’re still alive, but you will be asked to pay a significantly higher premium upon renewal.

2. Benefits Provided

A term life policy only provides death benefits while whole life includes other benefits such as automatic savings, borrowing, and dividends. Just like savings, whole life policy cash value accrues over the years until you die as your investment continues to earn tax-free interest. You also receive annual dividends, which are rewards from the company determined by the amount of profit made per year. The insured may choose to receive the dividends or re-invest them to add to the policy’s cash value.

Lastly, you are allowed to loan your insurance benefit under a whole life policy. The cash value is affected when you borrow from your benefit. but there are no penalties or charges for this type of loan transaction. Term coverage features none of the additional benefits of whole insurance, including savings, dividends, and loans.

So, Which One is Better?

When you have tight finances and a solid prediction that your life will end within a specified period, a term policy is a financially savvy option. It doesn’t include other benefits that the whole policy does, but it can keep you from going broke with affordable premium rates. The better choice is dependent on your specific situation and financial capability. Whole life offers a better deal but may be unattainable for some persons; hence, neither is unimportant or of lesser quality than the other.

If you need assistance with your life insurance coverage, contact the experts at James Page Insurance. We’re always available to answer all your insurance-related questions.

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