Factors Affecting Your Premium | PFR Insurance (2024)

Insurers look at many factors to determine if an applicant is eligible for one of its programs and to determine what the premium will be. Common factors include:

Driving record

The company will ask for information about accidents and moving violations/convictions for any driver to be covered by the policy for the prior 3 to 5 years.

Garaging of the vehicle

The location where the vehicle will be kept and/or driven affects the rates. Some areas have higher rates of collisions, while others may have higher theft and vandalism rates.

Gender and age of drivers

Statistics still show that males have more accidents than females; statistics also show some age groups have higher rates of claims than others.

Marital status

Claims records indicate that married policyholders have fewer claims than unmarried policyholders.

Prior insurance coverage

Companies will ask if you have been insured, and whether you have been canceled or non-renewed in recent years.

Miles driven and use of vehicle

The use of the vehicle (driving to work or school, pleasure use, business use) and the number of miles driven will affect the premium. Higher daily or annual mileage and some types of usage create a greater exposure to claims.

Make and Model of vehicle

The type of vehicle driven will directly affect the premium.

Licensed drivers in your household

Any licensed driver in your household may affect the premium. "Licensed" includes an operator with a permit.

Claim history

Insurers will ask about any claims that you or any driver had during the past three to five years.

Credit history

Most insurers also consider your credit history to determine the appropriate premium to charge. Companies must comply with the requirements of the Federal Fair Credit Reporting Act in their use of this information to come up with an insurance score.

Discounts

Companies offer discounts for insuring multiple vehicles or having other policies with them (such as a homeowners or renters policy), for taking driver education courses, qualifying as a good student, having safety devices, low mileage, and good driving records.

FAQs

Factors Affecting Your Premium | PFR Insurance? ›

Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age and your driving record.

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What factors affect insurance premiums? ›

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What are 4 factors that are used to determine the cost of insurance premiums? ›

Some factors that affect your insurance include age, gender, miles are driven, and marital status.

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What are the factors that determine the premium amount in insurance? ›

Factors influencing health insurance premiums

Age – This one of the critical factors that affect the premium amount. ...
Past Medical History – ...
Occupation – ...
Policy Duration – ...
Body Mass Index (BMI): ...
Smoking Habits – ...
Geographical location: ...
The Type of Plan You Choose:

More items...

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What is premium factor in insurance? ›

The basic premium factor is the acquisition expenses, underwriting expenses, profit, and loss conversion factor adjusted for the insurance charge for a policy. The basic premium factor is used in the calculation of retrospective premiums and does not consider account taxes or claims adjustment expenses.

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Which 5 factors determine the premium amount? ›

How insurance companies set health premiums Five factors can affect a plan's monthly premium: location, age, tobacco use, plan category, and whether the plan covers dependents. Notice: FYI Your health, medical history, or gender can't affect your premium.

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How does risk affect insurance premiums? ›

Insurance carriers will evaluate the risk of insuring you based on information you share in your life insurance application and the result of your medical exam. The riskier you seem to insure, the higher your premium will be.

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What does the insurance premium depend on? ›

Insurance premiums depend on a variety of factors, including the type of coverage being purchased by the policyholder, the age of the policyholder, where the policyholder lives, the claim history of the policyholder, and moral hazard and adverse selection.

What are 5 or more factors that increase your health insurance premiums? ›

Factors affecting health insurance premiums

Age and Gender:
Medical History and Current Health Condition:
Coverage Type and Level:
Location and Local Healthcare Costs:
Deductibles, Copayments, and Coinsurance:

Sep 1, 2023

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What are the factors that determine the premium for term insurance? ›

Factors That Impact Life Insurance Premiums

Factors that Determine your Life Insurance Rates. ...
Your Age. ...
Your Gender. ...
Smoking. ...
Your Health and Family History. ...
Your Current Health. ...
Your Weight. ...
Your Occupation.

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What two factors affect the cost of insurance premiums? ›

Driver and vehicle risk

Like any insurer, we try to match insurance costs to a driver's and a vehicle's risk—that is, the likelihood of a claim in the future. The higher the risk, the more you'll pay in insurance. The more crashes you've caused, for example, the more it will cost to insure your car.

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What are the factors affecting insurance demand? ›

Among the six determinant factors, income level takes the highest fraction in influencing the demand for life insurance policy followed by age factor, family size, gender, education level and health status in that order.

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What are the 3 factors that determine the premium for a particular policy? ›

There are three primary factors used as the basis for determining premium costs in life insurance.

Mortality.
Interest. Expenses.

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What are 5 factors that affect your home insurance premium? ›

The cost of homeowners and tenants insurance depends on a number of factors including:

location, age and type of building.
use of building (residence and/or commercial)
proximity of fire protection services.
choice of deductibles.
availability of any premium discounts.
scope and amount of insurance coverage.

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