In our experience here at Morco Insurance Agency, many people find insurance shopping frustrating. One of the biggest sources of frustration tends to be the lack of a fixed price—since insurance quotes are calculated for each individual based on their particular circumstances, it takes much longer to get a price, let along to compare prices. In this article, we will try to alleviate this frustration (at least a little) by shedding some light on what factors are used to calculate insurance quotes.
The main thing you need to know about insurance quotes is that they are based on the level of risk you (meaning your home, vehicle, business, etc.) present to the company. If the company judges that you will likely need to use your insurance coverage frequently to pay for damages, then they will charge you more, but if you are less likely to need to file claims, then they’ll charge you less. Below, we’ll go over a few examples of what risk factors insurers look at when coming up with insurance quotes.
- Homeowners Insurance – Home insurance quotes are usually based on risk factors such as the location of the home, the crime rates in that area, proximity to emergency services (closer is better), and local climate conditions.
- Auto Insurance – Auto insurers tend to look at things like the safety features on your vehicle, its age, and the number of miles on it, as well as the driving safety record of all the drivers on your policy. If you have had multiple auto accidents in the past few years, your insurance quote will be higher than that of someone with no accidents.