Factors that affect car insurance premiums

Short Answer:

credit score
zip code
driving record
age & sex of driver
vehicle & coverage
levels of liability
inflation

Long Answer:

Credit Score
This is listed first for a reason. In my opinion, it is the most important factor when determining risk. If someone has a lower credit score, they are much more likely to turn in a smaller claim that someone with a higher credit score. The person with a higher credit score would normally NOT turn in these smaller claims (they would just pay out of pocket to keep their premium from going up).

FYI — when running quotes for a client or prospect, it does not show us their credit score. It shows their “insurance score” which is closely tied to credit and their propensity to turn in claims.

Let’s say your tires are worn, very worn, and in need of replacement. Someone with a lower credit score is less likely to replace the tires when the time has come. Imagine a car with bald tires barreling down a highway or icy road….I’ll just leave it at that.

Also, someone with a good credit score is more likely to practice safe driving habits.

Insurance companies are smart — they have to charge more premium if a client is more likely to turn in a claim or have an accident.

Zip Code
The area in which your car spends the majority of its time will also factor into the premium. If you live in an area with high traffic or crime, it opens the door for accidents and claims.

Driving Record
Obviously your history of turning in claims and tickets/accidents is going to affect the cost of insurance. Most companies look at the last 3 years, some preferred companies go back 5 years.

Age & Sex of Drivers
This one is also obvious; 16-18 year old drivers are more likely to be involved in an incident than someone who has been driving for 10+ years.

Myth: You receive a discount on car insurance when turning 25 or 26. This is a fallacy and should not be taken to heart. Every year after turning 16, it goes down a little bit, until maybe the 25 year-old range. It’s not like there is a discount for turning 25. Age is just one of many factors that affect the premium and the further away from 16 you are, the better. This has to level off at some point and I believe this happens around the age of 25.

Also, the sex of the driver has a small affect on the rate. Generally, female drivers are more careful than male drivers. This is especially true with younger drivers. You can argue all you want but the proof is indisputable.

http://www.iihs.org/iihs/topics/t/general-statistics/fatalityfacts/gender

Vehicle & Coverage
The bigger the vehicle, the more damage it could do to a building, another car, house, etc. Also, the cost of parts for a certain type of vehicle is important. Typically rare or high performance vehicles cost more to insurance because of how hard it is to find parts.

If two brand new cars cost $40,000 and $20,000, which one do you think would cost more to insure?

Having full coverage is going to cost more obviously, and the year/make/model of the car correlates directly to the price due to the reasons state above.

Levels of Liability
There are many levels of liability coverage which affect the premium directly. If an insurance company is providing $100,000 in liability coverage per accident, then they are on the hook for that amount should something terrible happen. Therefore, they have to charge for this elevated coverage.

It is important to maintain higher liability limits if you own things, specifically a home or business. In the event of a major accident and your liability limits are exhausted, you are personally on the hook for the remainder.

People with more to lose need to make sure they are covered properly, to protect everything they’ve worked for.

Sometimes people want the cheapest insurance available, sacrificing coverage for price, which leaves them vulnerable should they have a substantial accident.

Inflation
The cost for parts and labor increases a little bit every couple years, which means the insurance companies must adjust their rates to make up for the inevitable losses which will cost more and more each year.

Other Factors
Owning your own home usually equates to a nice discount. Having multiple cars usually results in a discount as well. There is also a “good student discount” for a driver with a GPA of 3.0 or better. Having an alarm or anti-theft device on your vehicle allows for added savings as well.

Thanks for reading and if you wanted to extend the dialogue or want a local, independent agent to shop your insurance, feel free to email me at cody@sailorins.com.

Cody Sailor
Sailor Insurance Agency
225 N. Main Street
Edwardsville, IL 62025

(618) 659-1495  /  www.sailorins.com

World Series of Poker / Las Vegas 2015

Instead of flooding Facebook with a million pictures and long status updates — I have decided to recap our summer using this blog.

My beautiful girlfriend/partner/lifer [Katelyn] and I left for Las Vegas in May, for what would be my 4th summer dealing poker at the Rio All-Suites Hotel & Casino for the World Series of Poker. I had to be there a week or two early to do some paperwork, which was totally cool since Katelyn was hoping to find a summer job and this allowed us to get a jump start on interviews, meeting people, etc.

Luckily, we have some very gracious friends in Las Vegas and we heard about a possible chip-runner position at the Bellagio poker room. She applied that day, interviewed shortly after, and landed the best non-dealing job in poker besides a floor supervisor. A chip-runner’s job is to go to the poker cashier and retrieve chips for players when they buy in or need another stack, as well as delivers food to the players’ table.

The Bellagio Poker Room is by far the best in Las Vegas, in terms of quality and variety of poker games. They have allllllll the big money games. Katelyn was lucky enough to deliver a meal to Doyle Brunson. If anyone knows poker, they know about the legend of Doyle.

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Here is a picture of Katelyn in her work attire, along with a very nice dealer named Joe, who couldn’t stop talking about how hard she worked all summer.

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As for me, I worked about as hard as they let you (40-45 hours/week) for 7-8 weeks. I dealt cash games on the evening shift for the first half the summer. The second half of the summer I was on the day shift and dealt the tournaments.

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As you can see here, there are hundreds of us who call Las Vegas “home” for 2 months out of the year (this is just WSOP dealers at the Rio). After the main event action concludes, a bunch of these people will be in Florida or Oklahoma — dealing the next tournament.

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Thanks to Katelyn for being my caddy/driver while I whacked a little white ball around the Rockies for a few hours. This was in Eagle, CO, on our way to Vegas.

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This is our backyard for the summer. We were about 2 miles from the Strip, living with  about 7 traveling poker dealers. Katelyn and I had our own room & bathroom. Shout out to Mark, Sandy, and Clarke for allowing us to hang out for a few months.

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A cool million #relationshipgoals

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We went hiking in Las Vegas many times. Mount Charleston is about 45 minutes from the strip and its at least 20 degrees cooler due to the elevation. Those hiking poles are very helpful if anyone is serious about hiking. They are basically just adjustable ski poles.

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The Gold Spike had life-size beer pong and jenga, four square, shuffleboard, cornhole, ping pong, life-size billiards but using soccer balls, etc. I would highly recommend this place if you’re ever in Las Vegas. It is located near Fremont Street, which we visited close to 10 times this summer. Cheap drinks, cheap gambling, people watching, live music, street performers, etc.

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Hofbrauhaus Las Vegas

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Las Vegas 51’s Game (Met’s AAA team)
*$1 beers on Thursday nights

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Since we drove 25 hours across the country, a miniature Cali trip was in the books. We rented some beach cruisers and biked up and down Venice/Santa Monica beach. We stayed with a buddy from high school, Tim Bryant, who is literally living the dream in LA.

We are very lucky to be in a position to do this ‘summer gig.’ If we just gave it up or never tried to do it in the first place, it would be a missed opportunity.

**Shout out to my boss & loving mother for allowing me to have these experiences. She said if she was in my shoes, she would be doing the same thing, which is a comforting/supportive thought as I spent time away from the insurance business.

I will mainly be using this blog for insurance topics or updates to the insurance industry. I hope you enjoyed a peek into our spontaneous life.

“If you can’t do what you imagine, then what is imagination to you?”

Obamacare in a Nutshell

The objective of this post is to explain “Obamacare” and the changes in the health insurance marketplace.

I will start off by saying: Whether or not you agree with the recent changes and the political stances that come with it, I don’t necessarily care because I have my opinion too, and it is probably similar to yours. 🙂

Back in the day (last year), you weren’t required to have health insurance. Now, its required. By required, it means you get penalized for not conforming (penalty is the greater of $325 or 2% of your yearly income).

So here we are…whether we agree or disagree with this requirement, it doesn’t matter, we have to do the best with what we have.

One of the main changes is that the government is basically offering to pay for your health insurance premiums (Obamacare). If you make too much, you will have to pay 100% of your premium. If you make too little, you get thrown into medicaid, where your doctor/hospital options are slim.

If you make somewhere in between too much and too little (most of us), you will be eligible for a “premium tax credit.” The government will be paying a % of your health insurance premium.

A website that roughly determines your subsidy % is as follows: http://kff.org/interactive/subsidy-calculator/
*Note: this tool gives an estimate, not exact figures.

Now, you don’t have to take the premium tax credit to pay for your premiums…you can choose to pay your full premium and receive the tax credit when it comes tax season.

Another change in the health insurance market involves pre-existing conditions. Before this year, you would get denied for having certain diseases or cancer. Or they would exclude the certain illness and anything associated with it. Underwriting was tough.

Now you can get coverage no matter your health status, the price is based off your age, zip code, and tobacco use. The important factor nowadays is your income, which determines how much you’ll have to pay, since the government is paying for a portion of it.

Normally, what people do (more often than not), is they go on healthcare.gov, type in their info, and choose the cheapest plan.

The consequences of doing this won’t become apparent until you go to USE the health insurance. The last thing you want to do is go to the doctor when you’re ill and realize your doctor or hospital is out of the network. Also, its important to choose a plan that best reflects how often you go to the doctor, and what prescriptions you are on (prices for drugs vary depending on the plan).

Usually for auto/homeowners insurance, you pay a little extra to have an agent (it’s built into the price). For health insurance, the cost is the exact same whether you have an agent or not. 

Therefore, I am here to field any questions and help you through the enrollment process.

November 15th – February 15th is the next “open enrollment period” where you can purchase a health insurance policy. You can only buy one before that date if you have a special life event (loss of coverage, move state to state, have a baby, etc). This upcoming “enrollment” is basically a period where you can get a policy for 2015.

If you are wondering about your situation, I would like to set up a casual, informal meeting to figure out:
a) if you need to do anything at all
b) what plan best fits your situation
c) what type of subsidy you should expect when purchasing a plan

Upon learning what you need to do, I can then email you the plans to look over, and we can go from there. I’ve been trying very hard NOT to flood Facebook with insurance crap. However, this is an important topic and I think everyone should be educated, since no one seems to know anything about health insurance (even people in the insurance industry who bury their head in the sand versus learning about it).

I’ve been selling health insurance since 2011, along with auto, homeowners, and life insurance. We are indepedent agents representing 30+ companies including Progressive, Safeco, Travelers, and MetLife. We are located at 225 North Main Street in Edwardsville, next to the courthouse.

I appreciate the time it took for you to read this post. If just one person learns anything from reading this, then I consider it a success. I look forward to being a resource to my friends in the future and wish you all best of luck moving forward.

Cody Sailor
cody@sailorins.com
(618) 659-1495

http://www.sailorins.com