Several factors affect the rates you'll pay for your car, home and life insurance, including social factors. Where you live, how you get to work and what type of eating habits you have can all make a significant difference in the amount of dollars you spend each month on insurance. Understanding these social factors can help you make the changes in your own lifestyle that can lower your monthly insurance rates.
Where you Live
Where you live constitutes one of the most important factors that affect how much you'll pay for insurance. Simply put, if you live in a zip code with less crime, you'll generally pay less for insurance each month. Consider auto insurance. Your auto insurer will charge you fewer dollars each month if you live in a zip code that doesn't have a high number of auto break-ins or vehicle thefts. Similarly, if you live in a zip code that doesn't have a high number of home invasions, you'll pay less for your homeowners insurance each month. This has become a source of some controversy. Government officials in states such as Michigan have long criticized insurers for charging the residents of cities such as Detroit higher rates just because they happen to live in a certain zip code.
Bad habits can dramatically increase your insurance premiums each month. If you smoke, you'll pay significantly more each month for your life insurance policy. If you overeat, and have the extra pounds to show it, you'll pay more for life insurance depending upon your weight. If your bad habits, lack of exercise, smoking and overeating have led you to serious health problems, your life insurance company will increase your rates. If, though, you have never smoked, you keep your weight down and you've rarely suffered from any serious illnesses, you'll pay less each month for life insurance.
Bad habits can also impact your auto insurance rates. If you're a safe driver, and have rarely been involved in serious accidents or have never had any speeding tickets, your auto insurance rates will be lower.
Your Work Situation
If you have to travel by car long distances every morning to get to your job, your auto insurance rates will rise. If you're fortunate enough to live in a walking neighborhood close to public transportation, your rates will fall if you take the train or bus to work every morning. Auto insurers figure that you'll be less likely to file accident claims or receive speeding tickets if you leave your car parked in front of your home or apartment every morning.
Though it creates controversy, many auto insurance companies rely on applicants' credit scores when determining their insurance rates. They say that drivers with low credit scores tend to file more accident claims, costing insurance companies more money. Because of this, they charge drivers with bad credit higher rates.
Don Rafner has been writing professionally since 1992, with work published in "The Washington Post," "Chicago Tribune," "Phoenix Magazine" and several trade magazines. He is also the managing editor of "Midwest Real Estate News." He specializes in writing about mortgage lending, personal finance, business and real-estate topics. He holds a Bachelor of Arts in journalism from the University of Illinois.