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It goes without saying that the insurance prices vary depending on the nature of the policy you opt for. Insurance companies are supposed to explore all the possibilities before they set the insurance prices. Here are a few methods introduced by the insurance companies to set a fair price value for the policies. Schedule rating method In this method, a certain amount is fixed as the base value. Companies take this base value as the starting point to set prices for different policies by adding the costs based on the additional coverage offered. Retrospective rating method This method is usually used for polices that ensure complete protection against the risks that are highly unpredictable. The burglar insurance policy can be cited as an example. It covers for the losses caused by theft. No one can predict as to how often a house or a company may be burglarized. Insurance prices are fixed based on the previous history of policy holders in terms of theft cases rather than sticking to the standard base value. In burglar insurance, the amount that has to be paid as the premium is highly dependent on whether the policy holder has been a victim of burglary in the past or not. Cases of burglary can have a huge impact on the prices of these policies. On the other hand, if there have been no cases of theft reported after the taking of the insurance, you can enjoy discounts on the insurance renewal next year. Experience rating method This method takes the previous claim records of the policy holder into consideration while deciding the price for the policy. Normally, this method is applied for insurance policies such as automobile insurance, worker’s compensation policy, general liability insurance policy and the like. Insurance companies calculate the risk by evaluating the previous experiences with the policy holder and the prices are fixed only based on this evaluation. Factors that influence the insurance prices Insurance prices are directly related to certain factors such as age of the policy holder, nature of the job, risk associated with the insured item, duration of the insurance plan etc. Insurance rates can go up or down depending on these factors. Age group It is usually seen that the insurance companies come up with different insurance rates for different age groups. If you analyze the insurance rates, you will find that the insurance rates for younger people would be entirely different from those for the older people. Some companies give special considerations to younger people as far as the rates are concerned, especially for the health insurance policy. This is because of the fact that the younger people are less vulnerable to maladies when compared to the older people. When it comes to automobile insurance, unmarried people are charged higher than those who are married. Insurance companies believe that married people are matured and they do not drive rashly. Job nature The nature of the job of the policy holder plays an important role in determining the insurance rates. Companies set a definite price value for a particular group of working class and it remains constant for all those who belong to this working group. Hence, it is a wise step to compare the benefits offered by different policies and the insurance prices before you choose a particular insurance policy.You can easily calculate insurance prices at Alka's website (the term in Danish is beregn forsikringspriser Alka). To read even more information on this topic, please follow this useful link.
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