Personal Factors That Affect Insurance Rates in Ghana

For someone who holds an insurance policy, the cost that you bear is the premiums you pay to the insurance company. To the insurance company, the receipts from the person insured must be adequate to cover the risk of a misfortune happening to him or her. The person purchasing the insurance policy reasonably wants to reduce the premiums he or she will pay while the insurance company wants to maximize the premiums they will be receiving. In order to reach a price that will be agreeable to both parties, the risk associated with coverage must be the deciding variable.

So, what constitutes risk? This differs from one individual to another. This article will explain what some of these personal risk factors that affect insurance are. In Ghana, vehicle insurance is required by law so it is likely that it will be the form of insurance that most people will be familiar with. Therefore, the risk factors discussed will lean more towards vehicle insurance although it covers other kinds of insurance like life insurance and home insurance.

The first risk factor is your age. With regards to vehicle insurance, a young driver is assumed to have less driving experience than an older driver and therefore the risk associated with the young driver is more. This means a younger driver will likely pay more for vehicle insurance. When it comes to life insurance, a younger person will pay less for life insurance because the likelihood of death for them is lower than that for an elder person.

Another factor that affects insurance rates is the location of residence. A person’s residence can serve as a proxy for riskiness in quite a few ways. With regards to home insurance, a person’s place of residence lets the insurer determine the risk of natural disasters, theft or fires. A person’s place of residence also lets a company know the kind of environment in which a vehicle will be used so that they can determine the risk of an accident happening.

Other risk factors that affect the premiums you pay are your history of claims and accidents. If you appear to have made a lot of claims in the past the insurance company will either identify you as a high-risk person or someone who could be involved in insurance fraud. In such a case, they may charge you very high premiums to make up for the risk they will suffer for taking you in as a client.

If you are seeking for health insurance then the personal factors that matter will include your medical history, your level of fitness and any preexisting health conditions that you may have. If the insurance company evaluates you as a high-risk person then they may charge you a high premium or even pass up on the opportunity to insure you.

Now that you have information about the personal risk factors that affect insurance rates, you can make a better decision about the kind of insurance policy that will best work for you. Visit GhanaCompares.com and begin the search for your insurance policy today.

GhanaCompares Blog Team