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Big Reasons Insurance Rates Increase

rs-4A DUI or the purchase of a luxury vehicle can trigger an insurance rate increase. Even smoking is considered a valid factor for a higher premium. But insurance companies also use other methods to determine customer rates. The big reasons insurance rates increase is that insurance companies factor in the risk you represent.

If you always pay your bills on time, manage credit card debts responsibly, have no car accident on your record, never faced conviction of a felony, do not smoke or do not have any high-risk assessments attached to your name insurance premiums will delight you. But there are also other factors to keep in mind.

Occasionally, your credit score will raise a premium. Be very cautious if you’re considering the review of your credit score in hopes of lowering your premium. With the intent of using a good credit score to lower their insurance rates, customers may unintentionally find themselves paying higher premiums.

Shop a litte to Save a lot. Search for Lower Rates The three credit bureaus in the U.S. – Equifax, TransUnion, and Experian – could have varying scores. A person’s score may be high in Equifax, say 750, but not as high in Experian, perhaps 675. What the customer thinks could sway an insurance company into administering a lower monthly payment and possibly make it more expensive. The only state that does not raise the premium due to a lower credit score is Oregon. Think very carefully before asking your company to run your credit score.

The insurance market is tied closely to the economy, and effects on the housing market, hospitals, doctors, and lawyers will effect the premiums paid by insurance customers.

In addition to regular lawsuits, a general fear of being sued pervades various professions. With the rise of malpractice insurance and other liabilities to protect some professionals, the rates of insurance rise.

Insurance fraud comes with the business. Some people look for quick insurance claims because they want easy money. Fraud adversely affects the hard-working people who pay for insurance by way of increased premiums. Higher insurance rates do not happen right away, but over time and take a toll on consumers.

Lifestyle also heavily influences your insurance rate. If you are a “preferred” customer, meaning you pay bills on time and have a sparkling clean record, your lifestyle and past records will result in lower premiums. Smoking will raise your premium in a life insurance policy. Diet and exercise will also shape your rate; regular physical activity and a healthy diet will, as perceived low-risks, result in lower premiums, but poor diet and little to no exercise will cost you. High-risk hobbies and activities, such as sky-diving and scuba-diving will also raise your premium.

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