Insurance premiums

The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S. For consumer information, visit insureUonline.org.

Real Estate Insurance

 

 

 

Homeowners’ Premiums

Three basic levels of coverage exist actual cash value, replacement cost, and extended replacement cost/value. Policy rates are largely determined by the insurer’s risk that you’ll file a claim; they assess this risk based on past claim history associated with the home, the neighborhood, and the home’s condition.

The fastest and simplest way to calculate your home’s replacement cost is to multiply the square footage of your home by the local rebuild cost per square foot in your area. But there are a few other ways to get a replacement cost estimate for your homeowners’ insurance policy.

Your homeowners’ insurance premium may be influenced by: Your home’s square footage: Larger homes tend to cost more to insure because there would be more space to repair if it were damaged.

Buying homeowners insurance for a 100-year-old house is very different from buying insurance for a house less than 40 years old. Homeowners’ insurance rates are likely higher for older homes or for homes in need of repair.

How is the property insurance premium calculated?

You can calculate the approximate cost of homeowners insurance by dividing the value of your home by $1,000 and then multiplying the result by $3.50.

Another factor that plays a crucial role in determining the property insurance premium is the value of the property that needs to be insured. The value of a property is usually calculated on the basis of its super built-up area, rate of construction (per square feet), and geographical location.

Credit-Based Insurance Scores:
How an Insurance Company Can Use Your Credit to Determine Your Auto and Homeowners Premiums

1. FICO looks at five general areas it believes will best determine how you manage risk.

• • • Payment History (40%) — How well you have made payments on your outstanding debt in the past
    • Outstanding Debt (30%) — How much debt you currently have
    • Credit History Length (15%) — How long you have had a line of credit
    • Pursuit of New Credit (10%) — If you have applied for new lines of credit recently
    • Credit Mix (5%) — The types of credit you have (credit card, mortgage, auto loans, etc.)

2. LexisNexis looks at the information on your credit history from credit bureaus like Experian to compute your insurance score, meaning that your credit score will impact your credit-based insurance score. Favorable factors might include Long-established credit history.

Favorable factors might include:

• • • Long-established credit history
    • No late payments or past-due accounts
    • Open accounts in good standing

Unfavorable factors might include:

• • • Past-due payments
    • Accounts in collection
    • A high amount of debt
    • A short credit history
    • A high number of credit inquiries

You can ask your insurance company if a credit-based insurance score was used to underwrite and rate your policy and which risk category you were placed in after you receive a quote.

In some cases, your credit won’t be used to determine your insurance premium. If you live in California, Hawaii, or Massachusetts, your credit score isn’t a rating factor. This is because these state’s legislation feels credit score evaluation disadvantages, low-income drivers. If you live in one of these states, you’re in the clear. 

Outside of this, you have a few options to find car insurance without a credit check. Consider telematics and usage-based car insurance. Usage-based insurance policies, backed by telematics, base your insurance rates on your driving performance, rather than demographics. Using an in-car device or a mobile app, a telematics device monitors your driving behaviors to create your premium. Telematics can monitor the following:

• • • • Harsh braking
      • Rapid acceleration 
      • Mileage
      • Time of day driven 
      • Mobile phone usage

In theory, usage-based insurance is great for safe drivers who might be paying more for car insurance because of non-driving-related factors — for instance, poor or low credit. While telematics is relatively new in the insurance industry, most popular companies have their own programs in addition to their standard pricing model. The only true telematics-only car insurance company is Root.

Depending on your state, a poor credit score can impact you differently. Find your state below and follow the link for more state-specific information.

State	Very Poor (300-579)	Difference	Exceptional (800-850)
Alabama	$1,528.79	168% or $958	$570.48
Alaska	$1,034.61	91% or $494	$540.88
Arizona	$1,336.51	138% or $774	$562.74
Arkansas	$1,374.78	108% or $715	$659.69
California	$907.70	0% or $0	$907.70
Colorado	$1,660.15	127% or $928	$731.88
Connecticut	$1,384.88	101% or $695	$689.81
Delaware	$1,755.06	122% or $964	$791.04
District of Columbia	$1,645.84	140% or $959	$686.83
Florida	$1,989.38	120% or $1086	$903.16
Georgia	$1,381.14	98% or $684	$697.61
Hawaii	$540.59	0% or $0	$540.59
Idaho	$971.21	118% or $525	$446.18
Illinois	$1,160.44	114% or $619	$541.39
Indiana	$1,043.20	101% or $525	$518.06
Iowa	$827.44	85% or $381	$446.58
Kansas	$1,333.49	104% or $680	$653.77
Kentucky	$2,296.13	179% or $1473	$823.17
Louisiana	$2,150.15	113% or $1139	$1,010.93
Maine	$755.98	86% or $349	$406.74
Maryland	$1,177.89	94% or $571	$606.60
Massachusetts	$638.38	0% or $0	$638.38
Michigan	$3,420.33	198% or $2272	$1,148.55
Minnesota	$1,326.54	140% or $774	$552.18
Mississippi	$1,423.70	113% or $754	$669.89
Missouri	$1,640.86	173% or $1040	$600.50
Montana	$1,268.85	116% or $682	$586.93
Nebraska	$1,143.58	103% or $580	$563.90
Nevada	$2,353.06	199% or $1567	$786.20
New Hampshire	$983.16	105% or $504	$478.86
New Jersey	$1,568.09	117% or $847	$721.18
New Mexico	$1,198.89	101% or $601	$597.56
New York	$1,695.69	123% or $935	$760.64
North Carolina	$713.36	59% or $265	$448.59
North Dakota	$1,239.66	118% or $671	$568.84
Ohio	$967.03	118% or $523	$443.75
Oklahoma	$1,316.40	88% or $615	$701.49
Oregon	$1,336.03	117% or $721	$614.86
Pennsylvania	$1,305.37	114% or $696	$609.33
Rhode Island	$1,985.02	122% or $1090	$894.62
South Carolina	$1,420.65	133% or $811	$609.48
South Dakota	$1,241.46	110% or $652	$589.94
Tennessee	$1,499.47	146% or $889	$610.58
Texas	$1,549.86	87% or $720	$829.76
Utah	$1,256.99	149% or $752	$505.38
Vermont	$1,139.91	144% or $672	$467.73
Virginia	$818.51	94% or $396	$422.35
Washington	$1,149.85	125% or $638	$511.52
West Virginia	$1,254.92	100% or $628	$626.72
Wisconsin	$973.47	109% or $507	$466.76
Wyoming	$986.79	59% or $367	$619.71

Life Insurance

Term Vs. Permanent Life Insurance

Term life insurance is a life insurance policy that covers the policyholder for a specific term or amount of time. The policyholder determines the term of the life insurance policy, which typically ranges from 10 to 30 years and can increase in 5-year increments. Term life insurance is one of the most affordable types of life insurance.

Compared to term life insurance, which is limited to a specific amount of time, permanent life insurance is a type of life insurance policy that provides the policyholder and loved ones with life-long protection. Some types of permanent life insurance include the ability to earn cash value, which can be accessed while the policyholder is alive.

The premium rate for a life insurance policy is based on two underlying concepts: mortality and interest. A third variable is the expense factor which is the amount the company adds to the cost of the policy to cover the operating costs of selling insurance, investing the premiums, and paying claims.

The primary unit for figuring out a life insurance rate is the rate per thousand (cost per $1000 of insurance), which can vary depending on which factors influence it (age, gender, etc).

Rates for Accidental Death & Dismemberment (AD&D)

Cash Value Features

1. Cash Value Life Insurance is a type of insurance where the premiums charged are higher at the beginning than they would be for term life insurance. The part of the premium not used for insurance is invested by the company and builds-up cash value.
2. Whole life is fixed premium insurance that covers you with a level face amount for as long as you live. Some policies function like term insurance and offer term limits of 20 years or coverage until age 65. Also, it is a cash-value policy.
3. Universal Life Insurance is a flexible policy that allows the owner to adjust the premium amount and face value. Cash value = premiums fewer expense charges. If your cash value is less than your face value, the coverage may end or be reduced.
4. Variable Life Insurance is a kind of insurance where the death benefits and cash values depend on investment performance. Be sure to get the prospectus for this type of insurance, your benefits and cash value may lower or disappear if your investments perform poorly.

Health Insurance

Health policy can be defined as the “decisions, plans, and actions that are undertaken to achieve specific healthcare goals within a society”.^[1] According to the World Health Organization, explicit health policy can achieve several things: it defines a vision for the future; it outlines priorities and the expected roles of different groups, and it builds consensus and informs people.^[1]

There are many categories of health policies, including global health policy, public health policy, mental health policy, health care services policy, insurance policy, personal healthcare policy, pharmaceutical policy, and policies related to public health such as vaccination policy, tobacco control policy or breastfeeding promotion policy. They may cover topics of financing and delivery of healthcare, access to care, quality of care, and health equity.^[2]

You will find that there are two basic types of health insurance, indemnity and managed care.

Managed Care

Managed care has a different set of rules and regulations when it comes to its coverage type. A staple of managed care is the health maintenance organization, generally referred to as HMO. The deductibles for health maintenance organizations are lower than for managed care or other services. In some cases, there are no deductible payments required at all.

The rates for co-payments are on the lower end of the scale and are for a fixed amount. The costs of non-hospital and non-accident costs will also be included in HMO coverage.

A limiting factor of HMO coverage is a user can only choose from the physicians, hospitals, and other service providers on the list of their chosen contracted partners. The use of any outside doctors or hospitals would make you have to pay the full amount yourself.

Indemnity

Indemnity health insurance most likely will give you more flexibility and potential choices than managed care. The out-of-pocket cost is more, but you are free to pick any type of healthcare provider you wish to use.

You will have to pay a yearly deductible, probably a few hundred dollars, before your coverage will be enabled. It will cover every service within the contract, but it won’t pay for the full amount. Your required payment will generally be in the area of twenty percent.

Most of the time, indemnity insurance only covers accidents or illness. It won’t pay for other types of care like flu shots or cosmetic surgery. It may take care of prescription drugs or psychotherapy.

National Health Insurance Agencies is a quality health insurance website.

Each insurance brand may offer one or more of these four common types of plans:

Health Maintenance Organization (HMO)

An HMO delivers all health services through a network of healthcare providers and facilities. With an HMO, you may have:

• • The least freedom to choose your health care providers
  • The least amount of paperwork compared to other plans
  • A primary care doctor manages your care and refers you to specialists when you need one so the care is covered by the health plan; most HMOs will require a referral before you can see a specialist.

Paperwork involved. There are no claim forms to fill out.

Preferred Provider Organization (PPO)

With a PPO, you may have:

• •  A moderate amount of freedom to choose your health care providers — more than an HMO; you do not have to get a referral from a primary care doctor to see a specialist.
  • Higher out-of-pocket costs if you see out-of-network doctors vs. in-network providers
  • More paperwork than with other plans if you see out-of-network providers

Paperwork involved. There’s little to no paperwork with a PPO if you see an in-network doctor. If you use an out-of-network provider, you’ll have to pay the provider. Then you have to file a claim to get the PPO plan to pay you back.

Exclusive Provider Organization (EPO)

With an EPO, you may have:

• • A moderate amount of freedom to choose your health care providers — more than an HMO; you do not have to get a referral from a primary care doctor to see a specialist.
  • No coverage for out-of-network providers; if you see a provider that is not in your plan’s network – other than in an emergency – you will have to pay the full cost yourself.
  • Lower premium than a PPO offered by the same insurer

Paperwork involved. There’s little to no paperwork with an EP

Point-of-Service Plan (POS)

A POS plan blends the features of an HMO with a PPO. With the POS plan, you may have:

• • More freedom to choose your health care providers than you would in an HMO
  • A moderate amount of paperwork if you see out-of-network providers
  • A primary care doctor who coordinates your care and who refers you to specialists

Paperwork involved. If you go out-of-network, you have to pay your medical bill. Then you submit a claim to your POS plan to pay you back.

OTHER HEALTH PLANS

A. Catastrophic Plan

 If you are under the age of 30 you can purchase a catastrophic health plan. With a catastrophic health plan, you may have:

• • Lower premium
  • 3 primary care visits before the deductible apply
  • Free preventive care, even if you haven’t met the deductible

Paperwork involved. You will want to keep track of your medical expenses to show you have met the deductible.

B. High-Deductible Health Plan With or Without a Health Savings Account

Similar to a catastrophic plan, you may be able to pay less for your insurance with a high-deductible health plan (HDHP). You can set up a Health Savings Account to help pay for your costs. The maximum you can contribute to an HSA in 2018 is $3,450 for individuals and $6,900 for families.  With an HDHP, you may have:

• • One of these types of health plans: HMO, PPO, EPO, or POS
  • Higher out-of-pocket costs than many types of plans; like other plans, if you reach the maximum out-of-pocket amount, the plan pays 100% of your care.
  • A health savings account (HSA) to help pay for your care; the money you put in an HSA is not taxed and can be used tax-free on eligible medical expenses. In order to have an HSA, you must be enrolled in an HDHP.
  • Many bronze plans may qualify as HDHPs depending on the deductible

Paperwork involved. Keep all your receipts so you can withdraw money from your HSA and know when you’ve met your deductible.

Disability Insurance

Disability Insurance often called DI or disability income insurance, or income protection is a form of insurance that insures the beneficiary’s earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work. This basic insurance is a key social justice concept.

Unemployment Insurance

This is not premium-based insurance; it is labor-based. Unemployment Insurance (UI) provides unemployment benefits, usually in the form of weekly payments, to eligible workers who become unemployed through no fault of their own, and meet certain other eligibility requirements. UI is administered jointly by the U.S. Department of Labor and individual states. In March 2020, new federal law greatly expanded unemployment insurance. Many workers who were not previously covered are now eligible. You may now be eligible if any of the following are true: Your employer permanently or temporarily laid you off due to coronavirus measures. Your employer reduced your work hours due to coronavirus measures. You are self-employed and have lost income due to coronavirus measures. You’re quarantined and can’t work due to the coronavirus. You’re unable to work due to a risk of exposure to coronavirus. You can’t work because you’re caring for a family member due to the coronavirus. In addition to expanding eligibility, new federal law also: Increases the weekly benefit amount that states currently provide by $600, until July 31, 2020. Provides an additional 13 weeks of benefits for people who are still unemployed after their state benefit period runs out Please note that each state implements the above policies within its own Unemployment Insurance program. Since the law has changed so recently, many states are still in the process of updating their systems. If you are eligible or think you might be eligible, you should apply now.

Auto Insurance

Insurance companies don’t like drivers with tickets. Good drivers are rewarded by paying less for car insurance because they’re less likely to file a claim. … You may be deemed a “high-risk driver.” You typically pay higher car insurance premiums because people with bad driving records tend to file more claims. While people under 25 are statistically more likely to get into an accident, each company handles the impact of age on the price of the policy differently. There is no hard and fast rule that once you turn 25, the price of your car insurance will decrease. Some carriers may offer a pricing break at 21 or 23.

Age is an important variable in pricing models. Like any other variable in the pricing model, age is used to predict the likelihood that the insured will make a claim. While people under 25 are statistically more likely to get into an accident, each company handles the impact of age on the price of the policy differently. There are a variety of ways, besides age, to receive discounts on your policy such as bundling a Homeowners or Renters policy with your auto coverage, paying your premium in full, or even choosing to receive paperless billing. It is important to check with each insurer on discounts you can qualify for when shopping for a new policy.

Comprehensive coverage on your auto insurance policy only covers items physically attached to your vehicle. This may include your car stereo or GPS device if it is factory installed. For coverage on items contained in your car such as iPods, clothing, and compact discs you will need Homeowners’ or Renters’ coverage. Many of CoverHound’s carriers and agents make it easy for you to add such coverage when shopping for your auto insurance policy. Be sure to inquire with them if you are interested.

Most accidents and minor violations stay on your driving record for three years. Accidents involving more serious violations stay on your record longer — 10 years for a DUI conviction.