10 Factors That Can Raise Your Insurance Premiums

Your Credit Score

Auto-insurance companies have found that people with low credit scores are more likely than those with high scores to get into accidents, so they charge them more when they can. That’s another good reason to pay close attention to your credit score. (A few states, such as California, don’t permit insurers to use credit scores when setting rates.)

Your Home's Claims History

Insurers share information on homeowners claims for up to seven years through the Comprehensive Loss Underwriting Exchange (CLUE). When you apply for insurance, the company looks at the claims history for your home, even for the time before you lived there. If the house has a history of water-damage claims, for example, it may be more likely to have future problems—and insurers will boost your rate. You can check a house’s CLUE report either before or after you buy it.

Your Car's Horsepower

You’d expect a Porsche Carrera to cost more to insure than a Toyota Camry. But if you buy a six-cylinder Camry instead of the four-cylinder model, it is usually more expensive to insure. In general, a four-cylinder car with moderate horsepower is less costly to insure than a six- or eight-cylinder car. You can get a rough esti­mate of annual insurance costs for more than a thousand vehicles with our new car rankings tool.

Your Driving Record

• Your record of moving violations can affect your rates for life and health insurance in addition to car insurance. Life insurers are worried about a higher risk of auto fatalities. More than two moving violations in the past three years is a fairly typical cutoff for the best rates, says Byron Udell, CEO of AccuQuote.com. Some insurers permit three moving violations, but others allow only one. And some health insurers will reject you if you’ve had a DUI within the past three or five years, says Keith Mendonsa, of eHealthInsurance.com.

Your Colleagues

If you have health insurance through work, the rates are based on the average risk of the group of employees. And the group’s health and age can make a big difference, especially for small companies (this will change in 2014 because of the new health care law). If your colleagues tend to be older and prone to illness -- and submit a lot of claims -- your health insurance premiums will generally be higher than they’d be if you worked for a start-up filled with twentysomethings. If you’re a healthy young person surrounded by preretirees with health ailments, you may be able to find a better deal on your own with an individual policy, whose rates are based on your own age and health. You can get price quotes for individual policies at eHealthInsurance.com and a list of all policies in your area at HealthCare.gov.

Your Weight

Obesity causes all kinds of medical issues that could shorten your life. And some life insurers have tightened their requirements for the best rates. The rules -- and base rates -- can vary a lot by insurer. But you may be ineligible for the lowest premiums if you’re 6 feet tall and weigh more than 205 lbs (with a body mass index of more than 27), says Byron Udell, CEO of AccuQuote.com.

• Your height, weight and body mass index can also make a big difference in your health insurance rates (this will change in 2014). A study by eHealthInsurance.com found that someone with a body mass index of 30 or above pays 22% more than someone with a BMI of 25. If you’ve recently lost weight, you may not get credit for your slimmer body until you’ve kept the pounds off for at least a year.

Your Education and Job

Auto insurers found a correlation between education and claims, with fewer claims from people with higher education levels. Each level of education you’ve completed may help lower your rate a bit, says Robert Hunter, director of insurance at the Consumer Federation of America and former Texas insurance commissioner.

Your job can also earn you a lower car insurance rate. Some companies offer lawyers and executives the best rates, and blue-collar workers the worst. Teachers often get a discount, too.

Your Family's Health

Most life insurers won’t offer the lowest rates if your parents or siblings died of heart disease or cancer before age 60. But some will boost your rates if any of those family members had heart disease or cancer before age 60, even if they didn’t die from it, says Udell.

Your Zip Code

CarInsurance.com studied cost differences by zip code and discovered that a 40-year-old man with a clean driving record and a 2012 Honda Accord would pay an average of $730 per year if he lived in Bullhead City, Ariz. (the least-expensive town in its study). But that same person with the same car would pay $1,280 if he moved just a few miles, across the Colorado River, to Laughlin, Nev. “The difference by zip code is usually hundreds of dollars, if not thousands,” says Des Toups, managing editor of CarInsurance.com. It’s all based on the insurance claims in your area and state laws that affect coverage and competition.

Your Hobbies

If you skydive, hang glide, rodeo ride or race cars, boats or motorcycles, don’t expect to get the lowest life insurance rates. Insurers may ask you a lot of questions about your hobbies when setting rates. For example, some types of scuba diving are okay, but others -- such as deep dives, cave diving or diving without PADI (Professional Association of Diving Instructors) certification -- can knock you out of the best-rate level, says Udell. Plans for foreign travel to risky areas -- including obvious hot spots such as Afghanistan, and less obvious ones such as Monterrey, Mexico -- can also knock you out of the best-rate category, he adds.

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