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Learn more about how your premiums are calculated here.
These trends will directly influence your insurance quote.

We Take a Closer Look at What Drives Up Your Premium

Understanding what you pay will make you a more informed consumer when shopping for a plan. Learn more about how your premiums are calculated here.

Some Things to Consider

Premiums are a monetary reflection of the risk the insurer is taking in issuing you a policy. In other words, your premiums represent how likely the carrier thinks you are to file a claim. High-risk populations will thus get a higher estimate than lower ones. Every carrier has developed a complicated mathematical formula, called an algorithm, to determine a person's claims susceptibility.

Examining the Trends

Risk assessment centers on an analysis of statistical trends. These trends will directly influence your rate. Insurers hire people to analyze mountains of data to identify certain trends. For instance, an auto insurance quote for a man will be higher than for a woman with an otherwise identical background because men are statistically more likely to speed and get involved in accidents. Similarly, people with bad credit usually represent a higher claims susceptibility, which is why your rate will be higher if you have a poor credit score.

Risk Pooling

Pooling refers to the fact that a certain portion of your premium dollars goes toward the cost of insuring other people. This is what makes it work. If everyone had to carry his/her own risk, your estimate would be sky-high, and the act of driving, buying a home, starting a business, etc. would be prohibitive. Pooling makes your plan work by spreading the risk out among many people. For example, your estimate is probably a little higher because of young men's tendency to drive fast and have accidents. You pick up some of the slack and the cost for the riskier elements of the pool.

Influencing Factors

The factors that influence your premiums will vary by the type of plan for which you are applying. For example, for a homeowners quote, your insurer will want to know things like the size of your home, the local building costs, the natural disaster susceptibility, etc. For an auto insurance quote, you will likely be asked about your age, gender, driving record, vehicle type, marital status, etc. Check out our Insurance Quote FAQ page if you have any questions.

You pick up some of the risk and the cost for the riskier elements of the pool.
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he factors that influence your premiums and insurance quote will vary by the type of insurance for which you are applying.
If everyone had to carry his/her own risk, your insurance quote would be sky-high, and the risk of driving, buying a home, starting a business, etc. would be prohibitive.
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For an auto insurance quote, you will likely be asked about your age, gender, driving record, vehicle type, marital status, etc.