Figuring the Cost of Personal Lines Insurance

You buy insurance, but do you know why you pay what you pay? Insurance companies research a lot of data in order to price “personal lines” policies—what you buy for your auto and home. They take into account risks as well as safety and mitigating factors that reduce cost. Competition from the marketplace comes into play. Each company computes this differently, which is why finding an agency with good carriers can make a difference to your bottom line.

The cost of auto insurance, for example, can be based on individual characteristics such as gender, occupation, education, location, age, even relationship status—all because there is data associating risk potential with such characteristics.  

Individual behavior is also factored in, including actions that may seem obvious, such as miles driven, claims activity or driving violations. Some actions are not as obvious but still important;  one of these is the insurance score, a blend of credit score, past claims, and payment history.

Also, car insurance costs more or less depending on the limits of liability and deductible amounts that you choose. The good news is that companies offer discounts for home ownership, alarms and theft protection, multiple cars or drivers in a household, and for a package policy (home, auto, umbrella with the same carrier).

Many of these same factors are used in pricing home insurance. Plus some more, such as age of the home; updates like roofing, electrical, plumbing and heating; building materials (frame or brick, kind of siding); square footage, and distance to fire hydrant/station.

You may also wish to increase coverage on “scheduled” (itemized and defined) items of personal property, such as jewelry, silverware or fine art. Your insurance agent can help you determine where such increased coverage might be warranted.

As you can see, insurance costs are affected by a host of issues—some within your control, some not—so it pays to talk to your insurance agent about your situation and the package that works best for you.

A graduate of Bryant & Stratton Business College with a degree in Accounting, Michele Stephens has 11 years of experience in personal and commercial lines and insurance underwriting. In business since 1975, Jones & Wenner is a large, diversified independent insurance agency in Fairlawn. Call 330-867-4434 with your insurance questions or visit