There are lots of factors that work to your advantage when you buy an insurance policy, but more work to your disadvantage if you are not properly tutored on how to maintain the validity of your insurance policy cover. While many factors work differently for various kinds of insurance policies, we shall examine factors that work negatively against you when you operate a life insurance policy or an auto insurance policy in this piece, and you can use these to determine some of others but it is best to speak with your insurance agent and advisor when you are ever in doubts.
jeg. A smoker and an alcoholic: When you are a smoker and an alcoholic, you tend to pay more for your auto and life insurance policies than other policyholders because you constitute a higher insurance risk to your insurance company. Smokes and alcohol among other unsafe health habits make you a loose and unstable driver on the roads, and you stand the risks of causing road accidents any time you drive thereby incurring insurance claims to your insurance company; and these unhealthy habits also shorten your life expectancy and increases your chances for hospitalization over health complications. Så, you pay very exorbitant premium rates to compensate for the negative lifestyles you live which constitute high risks yourself and others, and making the possibility for insurance claims very imminent.
ii. Suffer from bad credit: Insurance companies regard you as not financially responsible when you have bad credit, and consider you a high insurance risk to be insured when you apply for insurance policy covers. Most insurance firms will not even sell your insurance at all if they run a credit check on you and discover that you have bad credit. It is therefore advisable that you repair your credit and enjoy considerable amount of good credit before applying for insurance covers. While this is not an issue in Africa or some other European countries, bad credit means being in debts to several persons and private/government agencies with considerable unrepayable or unserviceable loans.
iii. Your age and residential area: You may not really be aware of this, but your age and possibly your residential area among other factors determine what you pay as insurance premium rates. For auto insurance, young drivers tend to speed while driving than aged drivers and therefore stand a high risk of being involved in an accident than aged drivers – so they pay more rates. Women regardless of their ages have been known to be careful drivers and less adventurous on the highway than men, so they pay less premium rates. Where you live and park your car determine if your car could be easily vandalized or stolen to necessitate an insurance claim settlement from your insurer, so you are slammed higher premium rates. And for life insurance, the older you get the likelihood of approaching the grave faster, so you also pay slightly higher rates than younger men. It should be pointed out that some of these factors do not operate in other countries apart from the U.K, U.S, Canada and Australia.
Foto kreditter: http://www.abc.net.au