Despite all of the TV ads for cheap car insurance, I have noticed an increase in rates. Now, I am not an economist, and cannot figure out why my rates are increasing at the same time my fuel bill went up. However, a lot of the people I talk to have seen increases in their coverage in the last few months, and I am not able to really explain it.
Most of the time, auto insurance premiums depend upon three large factors and dozens of smaller ones. Of course, the zip code you live in affects rates. Beyond that, your own age and driving history will matter. A middle aged driver with no accidents in the last few years will probably qualify for better rates than a 20 year old driver who has made a claim or two recently. And some areas just make more claims than other areas. Rural and small town drivers are going to enjoy better rates than comparable drivers in large urban areas. The frequency of claims, and the cost to settle those claims, will affect the way the insurer prices coverage.
However, no matter who you are or where you live, you can do a few things to bring your rates down. Approved driving safety courses can shave off 10 – 25 percent, and may balance out an accident or traffic ticket. This is especially important for younger drivers, and also for drivers who have had a recent accident or traffic ticket.
Another tactic, that works with some companies, is to combine business. If you own a home or another vehicle, find out about multi-policy discounts. Now some car insurers do not offer home insurance, but some of those companies have partnerships with other companies that do. If you can get a sizable discount off of your policies just by combining those policies, you can save hundreds of dollars a year. Plus, combining policies under one company can really simplify the management of your finances.
The last thing you need to consider is the type of car you drive. Insurers keep detailed statistics on just about everything, and they believe that some cars are just more prone to attracting large claims. A high horsepower sports car will be likely to have a higher rate attached to it than a sedate passenger car. Many newer cars already come with advanced anti-theft devices and safety features, and may actually be cheaper to insure than some older cars. Of course, some safety features and anti-theft devices can be installed to older cars, and that can make them less expensive to find coverage for too.
I did not really mention two other factors that insurers consider. That is, the way you use your vehicle. That may be hard to change. If the car is only used for errands and soccer games, you won’t declare as much expected mileage as a car that is used to make sales calls all around the state. Insurers do consider the expected mileage, but this may not be something that a person has that much control over. The last consideration is a credit report. These days, many large insurers do take this into account, and a poor credit report can disqualify the best driver from the best premiums. Of course, it is always good to keep credit under control, but again, this may not be something that can change, or at least change quickly.
And finally, take the time to shop around. The internet makes this fairly easy. Insurers all have different rate plans, and the company that really nails you on that credit score may not be your best bet. On the other hand, the company that offers the best multi-policy discounts may be your top choice.
