Skip to main content
First Tech Routing #321180379

First Tech Insurance Services

Woman sitting on a couch opening a box.
Woman sitting on a couch opening a box.

You and your friend have identical insurance policies, but pay a different premium. Why?

Application Premiums are determined by statistics and calculated by the underwriting departments within insurance companies. The insurance premium charged by a company is determined by statistical data on whatever the insurance covers and information you provide in your application. Your information is combined with other relevant data to predict the likelihood of having a claim against the policy—the higher the risk, the higher the premium.

For example, if an auto policy covers a teenage boy, data might show that teenage boys are more prone than the general population to cause accidents. A policy for him might cost more than one for an adult with a clean driving record, even for the same type of vehicle at the same coverage level. Accident history can have a lasting impact on your insurance premiums. Some studies indicate that a single accident claim could cause premium increases of more than 40 percent.

Insurance companies also use credit scores (except in California, Hawaii and Massachusetts) to inform their decision on establishing premiums for a variety of insurance types. Other factors that can affect your premiums include your occupation, your location, the age or type of your vehicle (for car insurance), and the value of your belongings. For a life insurance policy, a person may be asked about their personal habits or their family’s medical history, and could be given a physical exam. 

Like anything else, you get what you pay for. Higher premiums generally provide higher levels of coverage. It’s important to not judge a policy based only on the premium. For any policy, you want to fully understand what the policy covers and how much coverage it provides. 

Your agent can help you understand all of the details so you can make an informed decision. If you still have questions, contact a First Tech Insurance Service agent in your area today or call 855.855.8805.

 

First Tech Insurance Services is a wholly-owned subsidiary of First Tech Federal Credit Union.

Suggested Articles

Image for FIRE Up Your Retirement Approach FIRE Up Your Retirement Approach
Financial Independence Retire Early (FIRE) is a movement that encourages extreme savings as a way for people to stop working decades earlier than the typical retirement age. 
Simply put, financial independence means having enough money saved and invested that you don't need to work to cover your everyday expenses. Your savings and passive income streams give you the freedom to retire early and spend your time on other 
 
August 13, 2024
Financial Planning
Markets & Investing
Retirement and Longevity
Budgeting
Image for ira cd vs ira share certificate IRA CDs vs. IRA Share Certificates: What’s the difference?

You may already know that an IRA is a type of retirement account that nearly anyone can open. However, you may not be as familiar with an IRA certificate of deposit(CD) and their credit union counterparts, IRA share certificates.

July 21, 2023
LifeStage
Retirement
Financial Planning
Image for Three Ways to Improve Your Financial Wellness in the New Year Improve Your Financial Wellness in the New Year

Whether you love or hate the New Year’s resolution tradition, studies show that one of the most popular resolutions is healthier living—followed closely by setting financial goals.

January 09, 2023
Financial Planning
Financial Education