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How Insurers Determine Your Premium: An Interview with Tom Polzin of Polzin Insurance

By Tom Polzin

Tell us a little bit about your company and its foundation.

My dad started this agency in 1961. He started in insurance in Laredo Texas with his father-in-law (my grandfather) in the late 50's. We moved to McAllen in 1958 and he worked with a couple of agents down here before starting his own agency. I came into the agency in 1983 after I got out of the Navy and I've been here ever since.

First off, what is the definition of an insurance premium?

The insurance premium is the money paid by the policyholder to the insurance company to provide coverage under a given insurance policy for a defined period of time and primarily compensates the insurer for bearing the risk of a payout should a claim ever be filed.

What factors do insurance companies use to determine your premium?

The insurance companies look at several things to determine the premium you'll pay for your policy. They look at the age of the risk, how well the risk is maintained, type of construction of a particular risk, what part of the country the risk is located in and how close to a body of water, if the risk is inside or outside the city limits and how close the nearest fire hydrant or fire station is located. For a car they also look at the age of the car, the age of the primary driver and what kind of driving record the driver has.

Why is my income not a factor in this process?

Companies look at the type of risk being insured, how much the risk is insured for and where it's located to determine how much premium to charge the insured. Your income really has no bearing on this.

Is there any way to receive a reasonable premium with a low credit score?

The best way to get a reasonable premium even if you have a low credit score is to not over insure your property and take as high a deductible as you can afford. The higher the deductible means a lower premium because you are taking on more of the risk if a claim is ever filed against the policy. Also on an auto policy if you just carry liability only then your credit score isn't figured into the rate calculations so your premium will be lower.

What's the best way for people to get in contact with you and your company?

There are a couple of different ways to contact my office. My local number is (956) 682-3161 and my 800 number is (800) 933-8799. My fax is (956) 682-5987 and my website is www.polzininsurancergv.com and my email is tspcobra@yahoo.com

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