6 Things that Affect Your Auto Insurance Premiums
How much you pay for auto insurance is determined by a small army of underwriters who keep their noses in actuarial tables and statistical data for a living. This information that they receive allows them to determine one important factor in the insurance business: risk. How much of a risk you are to the provider determines how much you will have to dish out in premiums to offset that risk so that they can make a profit. Of course, buying insurance and selling it is a risk for both parties. Even the customer with the lowest levels of risk can (and has) go out and get into a car accident the day after they sign up - that's the risk a provider takes. You take risk every time you send in a payment, hoping you don't get into an accident, and if you don't then your money is gone for essentially no reason at all.
Insurance is the law, however, and a discounted rate does not come to everyone - especially those who do not know how to look for it. Here are 6 factors that you can work on that may lower your premiums:
- Choose your car carefully: The size, model and safety features of your vehicle are one of the primary factors that determine your rate. The larger the car, or the more solidly built, the higher your liability insurance will be. The more safety features it has, the lower your comprehensive coverage will be. In addition, high car payments may increase your premiums because your provider will have to pay if your vehicle is considered totaled. Consider looking for low auto refinance rates if you believe you are paying too much for your current vehicle.
- Ask for Discounts: Most companies have a long list of discounts that they offer to their customers. Loyalty discounts, accident forgiveness, multiple-policy savings, safe driver savings, etc. all count in small ways to help bring your rates down.
- Your neighborhood: Schools, safety, beauty, value - these are things that most people consider when deciding where they will live. Auto coverage is not on many lists when shopping for a home but where you live definitely has an impact. If you have questions about what effect your new neighborhood
- Drive carefully: Your driving record is another huge factor (of hundreds) that affect your lower rate. If you get into accidents where you are ruled to be even partially at fault, you can expect that your premiums are likely to increase.
- Fight the Ticket: Tickets that appear on your record also affect your premium. If you fight the ticket and win, there will be no notation made on your driving record and your rates will not go up.
- Prepay your insurance: Most insurers will offer slight discounts to customers who prepay the entire term (six months or 1 year), rather than paying monthly. Other companies will offer a discount if you pay monthly by auto-debit from your checking or savings account. This discount is applied directly to your rate and can save you quite a bit over the lifetime of a typical policy.