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What's My Insurance Risk?

We created the Insurance Risk Calculator to help you better understand your individual insurance risk.

Insurance is simple: it protects you from unpredictable financial risks.  An insurance policy is also simple:  a contract between yourself and an insurance company, where the American insurance company agrees to pay you if an unpredictable future event happens.  Regardless of the type of insurance, there are four core variables:

1 - The amount you must pay (Policy Premium).
2 - The types of losses the insurer covers (Named Perils).
3 - The amount the insurer must pay (Coverage Limits).
4 - The probability of loss (Underwriting Risk).

Determining the policy premium is as easy as contacting an agent and getting a quote.  Understanding the named perils and coverage limits is also relatively easy, with the help of online insurance education. Determining your individual financial risk can be very difficult or impossible for the typical insurance shopper. Insurance companies have an advantage over consumers due to their statistics and experiential knowledge. 

How to Use Your Insurance Risk Information…

Shopping for Policy Coverages and Limits

The most obvious way to use this information would be to help you determine if purchasing a particular type of policy or coverage would be appropriate for you. We all know that having collision coverage is important if you get in a car accident, but you may be more willing to forego coverage if the probability of needing it this year were 1 in 30, compared to 1 in 10. Of course the value of the vehicle, the cost of the coverage, your driving history and financial situation will need to come into play with a decision like that.

Understanding Your Insurance Needs

Another way to use this information is for a better overall understanding of your personal risk profile. For example, many insurance risk calculator users are surprised to discover the statistics of how likely they are to become disabled sometime before reaching retirement age. Knowing our statistical probabilities allows us to better identify the potential need for disability insurance.

Comparing Policy Quotes

The information and statistics provided by Insurance Risk Calculator can also be used as a reference for premium costs. For auto, homeowner's, and renter's insurance, you can see average insurance premiums for individuals with your risk profile. Compare this number with the insurance quotes given to you by sales agents to identify a good deal. Of course you must consider that these premiums are averages, and do not reflect your personal information(e.g. driving history) or your specific coverage needs.

Be Careful of These Insurance Risk Mistakes…

Ignoring the 'Devastation Factor'

Just because the chances of something happening may be small, don't underestimate the potential devastation to your family if it did occur. For example, the odds of a personal liability claim being brought against you may be only one in hundreds and the average payout may be between ten and twenty thousand dollars, but if someone were seriously injured on your property, they could still sue you for millions of dollars. They could still place all your current and future assets in jeopardy. Don't pass on the umbrella policy; if the improbable does happen, it could destroy your life!

Assuming You Are Average…

The risk information provided from the Insurance Risk Calculator is based upon averages. Your individual risk could be much greater or far less than the results given. For example, if your family medical history has an relatively large incidence rate of heart disease, your personal likelihood of dying prematurely may be much greater than the probabilities provided. Our calculations will give you a starting point, but every individual has their own personal risk.

Neglecting the Combination of Risks…

Although the risk of having any one particular type of insurance claim in any single year may seem small, when you add the probability of all the different things that could happen over several years, risks involved become much more apparent. We have broken down claim probabilities by type to paint a clearer picture of your risk profile but do not forget that many smaller probabilities, when added together, will create a significantly higher risk exposure.

What Questions are Answered?

What is my overall insurance risk profile?
What are the odds that I'll die this year?
What are the chances of death within ten years?
How old should I live to be?
What is the probability of having a collision claim?
How likely is a collision claim in the next ten years?
How much does the average collision claim cost?
What are the chances of having a comprehensive loss?
How much does a typical comprehensive loss cost?
What are the odds that I'll damage someone's car?
And over the next ten years?
How much do property damage claims usually cost?
How likely is it for me to injure someone in my car, and in the next decade?
How much do bodily injury claims cost the insurance companies?
What is the possibility of being struck by an uninsured motorist?
What are the odds of having a fire in my house?
How much do house fires cost?
What is the most popular homeowner insurance claims and how much do they usually cost?
What are the odds of me becoming disabled an unable to earn an income?
How long does the typical disability render someone unable to work?
and much more...

Where does this Information and These Statistics Come From?

Insurance risk probabilities derived by the Insurance Risk Calculator are formulated through a combination of proprietary equations formulated specifically for this project, using data distributed publicly by:

-2009 National Association of Insurance Commissioners
-Insurance Services Office (ISO)
-Insurance Information Institute
-U.S. Department of Transportation, National Highway Traffic Safety Administration
-Federal Highway Administration
-The US Mortality Life Tables
-Harvard University Initiative for Global Health and the Harvard School of Public Health

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The statistics and information formulated on this website is for entertainment and research purposes only. Every individual has unique insurance protection needs; insurance laws and coverages vary by region. It is the responsibility of all visitors of this site to do their own research outside of this website prior to making insurance purchasing decsions.We strongly encourage all visitors to seek the guidance of a licensed insurance sales agent within their respective region before making decisions about insurance coverage. InsuranceRiskCalculator.com, VirtualInsuranceAdvisor.com, and all related businesses will not be held responsible for the insurance purchasing decisions made by visitors of this site.

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