Insurance is very important for all people to have. Home, auto, and life insurance policies protect us from poor financial consequences when bad things happen, and it can really add up to pay for all of these insurance policies. If you are a high-risk customer, it becomes even harder to get all of these types of insurance for affordable rates.
What exactly makes an insurance customer high risk, though? It depends on a variety of factors and changes when talking about the different types of insurance. We’ll answer many questions about high risk insurance customers and how to avoid getting that label. If you do become a high risk customer, it’s important to know how much it will cost.
How much is high-risk life insurance? What are the prices of auto insurance for someone who has gotten in trouble with drinking and driving? Let’s discuss.
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#1 – Having an Underlying Health Condition
Life insurance is the type of insurance that a lot of people don’t want to think about. It often makes us think about our mortality and whether we are doing enough to stay healthy. This is a simple reality that life insurance companies all think about, too.
The life insurers don’t want to pay out the life insurance claim, and the only way they don’t have to do that is if you stay alive for as long as possible. There are many things that make a life insurance customer high risk. Some of these things are unavoidable, like our age.
For example, State Farm only charges about $23 monthly for a 25 year old to have a life insurance policy. That number goes up to over $320 a month when you get to be 65 years old.
Because you can’t avoid getting older, it’s vital that you control the things in your life that can lower your policy rate. Smoking is a lifestyle choice that multiplies life insurance rates dramatically. Chewing tobacco or drinking excessive alcohol are also high risk factors for health issues that lead to death. Lack of exercise is rampant nowadays because of a busy lifestyle.
Life insurance companies consider people who are obese high risk customers because they are more likely to suffer from things like diabetes, high blood pressure, and heart disease. If you are looking for life insurance that is affordable, you need to improve your health, and be conscious of what you put into your body.
If you are a high risk customer, it might be better for you to get a life insurance policy without having a doctor’s evaluation. These policies will be more expensive, but at least you’ll have life insurance. Getting a traditional policy is going to be very difficult if you have any of the health issues and underlying conditions we’ve talked about.
#2 – Living in a High-Crime Area
Many people don’t realize that simply living in a certain area code can bring your homeowners insurance rates up tremendously. If you have already moved to a new city, this factor is out of your control. You should always ask your realtor what the crime rate is in your neighborhood, specifically instances of home break-ins, before moving in.
You can bring your homeowners insurance rates down by adding security systems or surveillance systems to your house. Suggest starting a neighborhood watch so that criminals can be caught before the break-ins happen. There are ways to make high-crime areas more habitable, which could make homeowners insurance cheaper.
Even simple things like locking your doors and closing your windows during the night so people have a harder time getting into the house can allow you to make a successful claim to your insurance company. If you are negligent when someone has broken in, your insurance might not pay out the claim.
#3 – Driving Recklessly
There are a lot of things that make you a high-risk driver in the eyes of auto insurance companies. Driving recklessly is probably the number one action that makes your policy more expensive. This can take on a variety of definitions.
If you have speeding tickets, this makes you a higher-risk driver. If you go through red lights, this also makes you a high risk. And then there are really serious infractions that can get your license suspended and make it almost impossible to find an auto insurance policy.
Driving while intoxicated or under the influence of drugs is a huge mark against you. It means that you don’t have the judgment that is required to get behind the wheel, and you are putting everyone around you at risk of dying when you are on the road.
If you go without any driving infractions in the months and years after a DUI, it is possible to lower your insurance rates and get back in the good graces of insurance companies. You could also try getting your record expunged, but this often takes a lot of litigation that many people can’t afford.
It’s better to make good decisions on the road so you keep a clean driving record rather than having to do damage control in the aftermath of an accident or a ticket.
#4 – Owning Certain Pets
Something that most people don’t think about when they purchase a new pet is how it can increase their homeowners insurance. Pets present several risks for insurance companies, specifically dogs that are prone to biting their neighbors.
Breeds like Pitbulls and Rottweilers have always increased the owner’s home insurance because the insurance company has to pay for the medical treatment of anyone who gets attacked by the animal.
This can apply if you have an exotic pet, too. Some states have no restrictions on the type of animals people can buy, resulting in purchases of wild animals like lions and tigers. If you own an unusual animal like this, you should look into getting an exotic animal insurance policy. Traditional insurance is not going to cover attacks from these animals on nearby people.
Some of the things that make you a high-risk customer for insurance companies are obvious. Others are a little more specific and you should always ask your agent what you can do to make yourself less of a risk. This will help insurance companies and customers both save money in the long run.
Shawn Laib writes and researches for the insurance comparison site, Clearsurance.com. He wants to help inform people of the risk factors that lead to higher insurance prices.
