Car insurance is often one the largest expenses associated with driving and owning a motor vehicle. For individuals whose cars are paid off, it is typically the second largest bill after gas for the vehicle. For young drivers or those with sporty cars, high auto insurance rates can be even more expensive. This is why it is important to try to get the most cost effective auto insurance rates for your policy.
Factors Affecting Auto Insurance Rates
It is first important to understand what factors an affect your auto insurance rates. There are many different factors that are directly correlated to your auto insurance rates. Some of the most significant ones include:
• Age: Young drivers usually have higher auto insurance rates since they are more inclined to get into car accidents. Likewise, senior drivers pay sine of the lowest auto insurance premiums, since according to driving statistics they are less likely to get in collisions than younger drivers.
• Gender: Statistically speaking, females tend to be more cautious drivers and are less likely to cause a serious accident on average. Because of this, women are usually favored by insurers, which results in them having lower average auto insurance rates than their male counterparts.
• Address: The amount of car theft and potential collisions vary greatly depending on area. Typically, drivers living in smaller cities and suburbs enjoy lower auto insurance rates than drivers who live in urban areas. This is why most auto insurance providers will ask you for your zip code before quoting auto insurance rates.
• Driving experience: The longer you have had your license, the lower your auto insurance rates will be. Additionally, insurance companies will also check how many years you have been insured. If you were insured under a one company for many years, the company will often provide you with lower auto insurance rates as you are thought to be a more reliable driver.
• Traffic claims and tickets: All insurance providers will ask if you have ever received any tickets or if you have made any traffic claims in the last three years. They will also ask if you have been in a traffic collision that was your fault.
• Make, Model, and Year of the vehicle: Each auto insurer has statistical data compiled of collisions and theft for each specific car model. They utilize this data to figure out which models are cheaper and which models are more expensive to provide insurance for. Not only the make and model of the vehicle makes a difference, but the year and a trim level affects your auto insurance rates as well.
• Vehicle use and annual mileage: Insurance companies will have you estimate how many miles you put on your car each year. The more you drive your vehicle, the higher your auto insurance rates will be. Because of this, you should accurately estimate your annual mileage in order to qualify for discounts for low mileage use. Likewise, you will have to specify how exactly you will use the motor vehicle, for example whether you will use it to commute from school or work or if you will use it for business.
What Coverage Affects Your Auto Insurance Rates
When it comes to auto insurance rates, finding the best coverage and the most affordable rates is very important. You should consider how your policy protects you, your family, and your valuables carefully before deciding on a policy. Licensed insurance agents will try to provide you with the most competitive rates since they are competing with other companies locally, but to get the best deal you need to look into what terms they are offering you and which of those are the best for you. You should choose exactly what sort of coverage you need, and decide on what coverage you will not need. This way, you will purchase only the coverage that is right for you, and your auto insurance rates will be reflected in this. Here are some different forms of coverage that can affect your auto insurance rates:
• Bodily Injury Coverage: This type of coverage is required in nearly all states. If you are in an accident and the other involved party wishes to sue you for their medical bills, your policy will cover this part the cost. However, if you do not have bodily injury liability coverage in your policy, and the other party wins a suit, you may lose large amounts of money and potentially your personal assets, like your house. This type of coverage is one of the most important parts of your policy, so when considering your auto insurance rates you should consider how you are protecting your family and your possessions in conjunction to the cost. You should discuss just how much coverage you will need with your insurance agent.
• Property Damage Coverage: While bodily injury pays for the other party’s property damage and medical bills in the event of an accident, liability coverage covers the other party’s vehicle replacement or repairs. Replacing a vehicle can potentially be as high as $40,000, depending on what type of vehicle is involved. This can add up to significant financial losses if you do not get this coverage as a part of your car insurance policy.
• Personal Injury Protection: Personal Injury Protection (sometimes just referred to as PIP) is also another component of insurance that is needed in some states that affects your auto insurance rates. Personal injury protection is a part of your auto insurance policy that will pay for any medial cost you or your family incurs if you are involved in an accident. Even if the other party is at fault in the accident, they may or may not have the coverage or the money to cover your medical bills. However, your health insurance may cover this type so make sure to check your medical policy before buying additional coverage on your automobile policy since this coverage will increase your auto insurance rates.
• Collision Coverage: This type of coverage will pay for the replacement or repair of your car if it is involved in an accident. As your vehicle gets older, it will depreciate in monetary value. Be sure to discuss with your agent about the best collision coverage at the best rate. The amount of coverage you actually need may vary for different vehicles in your household, particularly if you have a wide variety of vehicles in your home, such as trucks or motorcycles. Your auto insurance rates will also vary if you have both new and older vehicles.
• Comprehensive Car Insurance: If your vehicle is stolen, damaged by a natural disaster, or vandalized, comprehensive coverage can pay for these losses. Like collision insurance coverage, the value and age of your vehicle should also be considered so that you do not overpay for insurance and have a policy with higher rates.
• Uninsured Motorist Coverage: If you are involved in an accident where it is the other party’s fault, but that party is either underinsured or uninsured, you may find yourself with serious financial issues. Although the best car coverage might not cover the full amount of your vehicle’s injuries or damages, uninsured motorist coverage will cover you no matter what sort of insurance the other party has. This part of your policy will pay for any bills associated with the accident regarding property damage. There are many motorists that drive with no or very little coverage even though it is not recommended or sometimes even illegal.
Comparing Discounts in Auto Insurance Rates
Every insurance company provides different discount packages in their auto insurance policies. One way to find the lowest auto insurance rates and price for your car insurance is to compare different companies and see what discounts they provide that you would qualify for. Some common discounts for your policy include:
• Multi-Vehicle Discounts: This discount is one of the most common ones. You can be qualified for this when you insure more than one vehicle on the same insurance policy. Doing so lowers the administrate work for the insurance company and helps keep your premiums lower than insuring the two vehicles separately.
• Safe Driver Discounts: You are usually qualified for safe driver discounts in your auto insurance rates if you have not been filed a claim due to an accident (usually in the last three years). You may also be eligible for the safe driver discount if you have participated in a driver’s safety course.
• Defensive Driver Discounts: Participating in defensive driving courses is a way to get discounts that can lower your auto insurance rates. While not all companies offer this discount, it is a fairly common discount so you should ask your insurer if you qualify. This discount can result in up to 10 percent off on your insurance premium. The defensive driver discount can also be an incentive for you to study more if you are already enrolled in a program since doing well can result in a great discount. Furthermore, you may learn some important defensive driving techniques which can help you avoid an accident in the future, which would save you money in the long run.
• Academic Discounts: This discount, sometimes called the student discount or a good student discount, is one that varies between insurance companies. In general, if you qualify under the category your provider considers as the “good student discount” you can save money on your insurance policy. Some companies provide discounts in excess of 10 percent. The idea behind this insurance discount is that good students are more likely to be better drivers. Usually this discount only applies to current full time students. The requirements to qualify vary from company to company. For certain companies, the GPA must be either above a 3.0 or in the upper 20 percent. For others, the discount is applied when the student makes the dean’s list. Typically, there is an age limit to this discount, but it is usually applicable to both high school students and college students.
• Safety Equipment Discounts: Purchasing a vehicle with security or safety equipment can help you qualify for discounts to your auto insurance rates. Even installing certain items after purchasing the vehicle can help you save money on your policy. Most of this depends on the specific insurance company and the type of equipment, but it is still beneficial to discuss these discounts with your insurance company.
• Anti-theft Device Discounts: There are often discounts for your auto insurance rates that are similar to the equipment discounts. In this case, these discounts are for drivers that install alarms or other theft prevention equipment on their vehicles. For example, some vehicles that are equipped with tracking devices or devices that turn off the vehicle off a certain amount of miles if it was hotwired may qualify you for a discount. These discounts are specific for each insurance company, so you should ask your insurer if you meet the requirements.
• Club Membership Discounts: Certain organizations and clubs work out deals with different insurance companies to provide discounts on auto insurance rates for their members. Some of these insurance discounts can be applied to your auto insurance rates, as well as other types of insurance coverage you may have. Not every organization or club has these deals in all areas and not every insurance company will honor them. Usually, it is worthwhile to at least check with any organizations you belong to see if they provide any discounts, and if so, which companies will honor them.
• Low Mileage Discounts: If the average miles you have driven is lower than many other drivers, you may be eligible to receive low mileage discounts. The purpose of this discount is that since you drive less, you are less likely to get into a car accident, so you are less likely to cost the insurance company any money. Although not every insurer offers these discounts, those that do may allow you to save up to 10 to 15 percent off your auto insurance rates. If you have recently changed jobs to a closer location and your daily commute is now shorter or if you are no longer using your car as often, you should make sure to contact your insurance agent to check if the reduction in your estimated weekly mileage helps you qualify for a discount.
• Military Discounts: If you have served in the military, you know that many businesses, even outside of insurance provides different military discounts. Many insurers provide discounts for both former and current members of the military as well as their families on their auto insurance rates. Who specifically qualifies may vary between different companies. Generally, current members of the military are eligible for these discounts.
• Payment Method Discounts: Many insurance companies offer discounts if you set up a specific form of automated payment in order to pay your monthly insurance bills. This payment is often an automatic debit payment from a checking account. You can check with your specific insurer to see if any discounts are available, if you qualify, and what the terms and conditions of each offer are.
• Preferred Parking Discounts: While this is a less common discount, some insurance providers will give you a discount on your auto insurance rates based on your parking. Some companies would prefer to avoid paying for you if someone else causes damage to your vehicle in a communal lot, such as an apartment parking lot. Having a private parking, or some other form of secured parking may make you eligible for the parking discount for your auto insurance rates.
• Retiree Discounts: Depending on the particular area you live in, the retirement age may be either at 55 or 65 years of age. Some insurance companies provide discounts to retired drivers. This is because retired drivers typically spend less time on the road in comparison to other drivers. Without having to commute daily, retirees usually put less mileage on their vehicles than their working driver counterparts who have added mileage with their daily commutes. If you are 55 years of age or older, you should ask your insurance agent if there are any discounts you qualify for. A retiree discount on your auto insurance rates can make a big impact on the amount you pay each month on your premium. This is a discount that is often offered outright by insurance agents, so it is important ask about to potentially save you money.
Tips for Lower Auto Insurance Rates
Many drivers overpay on premiums and end up with higher auto insurance rates because they do not take the time to get insurance quotes from more than one auto insurer. Many drivers are simply not aware of just how easy it is to obtain multiple car insurance quotes. Getting many quotes for the best auto insurance rates is even easier with the use of the internet and computers, which makes the entire process very quick and efficient. Within 15 minutes you can find the auto car insurance rates for your car. Switching to the least expensive or best value policy auto insurance rates can usually save you significant amounts annual premium or provide you with more adequate coverage. By shopping around, you can see what auto insurance rates are provided by different companies, what ratings a company has in an area, how quickly each company will process a claim, and more.
The next thing you can do to decrease your auto insurance rates is to increase your deductible. This is the amount you have to pay out of pocket when you make a claim before your insurance coverage starts applying to your claim. This is applicable to both collision and comprehensive coverage, but not your liability coverage. Increasing your insurance deductible can give you lower auto insurance rates, but you should be careful if you decide to do this. You must be able to afford the high deductible in the case you need to make an insurance claim. If you increase your insurance deductible from $200 to $500, you might potentially lower your premium anywhere from 15% to 30%. If you increase the deductible on your vehicle insurance beyond $1,000, you could potentially save up to 40% on your auto insurance rates. When you are getting quotes for auto insurance rates, be sure to inquire if your deductible will provide you with you more affordable auto insurance rates. But always think about whether you can afford to pay for your insurance deductible out of pocket before you decide to raise it to save on your auto insurance premiums.
Another way to lower your auto insurance rates is by dropping or lowering some of the coverage, but only if doing so is reasonable. Being under-insured may end up costing you more in the end in the case you are ever involved in a car accident. It only makes sense to drop some of your coverage to lower your auto insurance rates if you are driving an older model vehicle. If your vehicle is worth less than ten times the amount you pay for your insurance coverage, you should consider dropping your comprehensive and collision coverage altogether. These two kinds of coverage may account for 40 decent or more of your total cost of your premium while only covering your vehicles value. If any insurance claim payment you would possible receive in the case of an automobile accident would not exceed your premiums substantially, excluding the deductible, than it is most likely not worth the comprehensive and collision coverage. Eliminating this coverage is a great way to lower your auto insurance rates and get the lowest price.
A more direct way to get lower quotes for auto insurance rates is by first purchasing the right kind of vehicle. If you are planning to buy a new car, you should consider the expected vehicle insurance premiums into the sticker price of the particular vehicle. You can compare different auto insurance rates online to see if your ideal car will provide you with more affordable auto insurance rates. Vehicles that have some of the highest theft rates and rates of repair will costs will cost more to insure in comparison to those that have smaller chances of theft or repair. There are many different factors that are considered when you decide to purchase a specific vehicle aside from these so you should not but so much focus on them at the beginning of your search. However, once you narrow your choices down to just a few different vehicle models, you should take the time compare what your auto insurance rates may be. This comparison between rates can help you make your decision on what car to purchase.
If it is possible, you may want to consider moving to a lower crime area. The location of your residence as well as where your daily commute to your work is also considered by insurance agents when figuring out your insurance premiums and auto insurance rates. This is consideration because of many different reasons. Those who live and par their vehicle in wealthy neighborhoods are less likely to have their car broken into, damaged, or stolen while it is parked overnight. Secondly, those who have more brief commutes to and from work are less likely to have their vehicles involved in an auto accident when they spend less time on the road in comparison to drivers with longer commutes to work. This is why insurance agents always verify your home address as well as telephone number. Insurance agents use this information when calculating your auto insurance rates to figure out if you live in a low-risk or a high-risk neighborhood, and they also compare with your employer’s information to figure out how long of a commute you have each day going to and back from work. These factors will determine your exact auto insurance rates and the cost of your insurance.
If you currently have many different insurance policies through many different insurance companies, you may be able to consolidate all of these policies so that you only need to work with one insurance agent for your insurance. For example, individuals may have different policies for their car, their boat, and perhaps even their boat or recreational vehicle. When you consolidate all of these separate insurance policies into one policy, or if you at least at least choose one company to handle these policies, you can eliminate many different hassles regarding insurance. Consolidation can also lower the total amount of money you pay for premiums each month on all of your insurance policies. Other types of insurance policies include health, life, travel, and dental. Depending on the insurance company you are working with, you might be able to consolidate these different insurance policies in order to receive cheap car insurance and lower auto insurance rates as well. Doing so will save you more money on a monthly basis.
If your car or vehicle is used as a seasonal or show vehicle, you might not need full insurance for the entire year for the vehicle. For any vehicles that are put in storage for a certain amount of time, it is better to purchase storage insurance, which is the best option for inexpensive car insurance. It is important to note that you cannot legally drive your vehicle if you only have storage insurance, but it will pay out in the case your vehicle is damaged during its time in storage. Depending on the exact model and make of your vehicle as well as the type of damage that has occurred to the vehicle, repairing the vehicle without any insurance can end up costing you much more in out-of-pocket expenses than having storage insurance. As long as you maintain your storage insurance policy on the vehicle while it is being stored, you can save yourself a lot of frustration, money, and time if something happens to your vehicle.
Your credit score directly affects many things in your life, and auto insurance rates are no exception. If you are looking for low auto insurance rates, one of the best courses of action you can take is to fix credit score if it is low. Having a bad credit score can be potentially costing you thousands of dollars each year on your auto insurance payments. You should keep your credit score clean by always paying bills on time, always paying back loans on time, and making sure to avoid maxing out any of your credit cards. Any bounced checks or bank overdrafts can also negatively affect your credit score as well. You should make sure to request a copy of your credit report from the three credit reporting bureaus on an annual basis, even if you think your credit report is clean. You may have been a victim of identity theft without even knowing, or there can be an error in your report that results in a lower score. By having these fixed, you can potentially lower your auto insurance rates and save money.
One of the most important ways to lower your auto insurance rates or keep them low is by maintaining a very clean driving record. Your first accident can result in as much as a 40 percent increase in your monthly premium, so you should make sure to drive very carefully while on the roads to help you’re your car insurance as affordable as possible. Many insurance companies offer discounts for safe drivers, although the criteria and definition of safe driving and having a clean driving record usually varies from agent to agent as well as from company to company. It is important to remember that agents are not likely to mention this discount if you do not say anything, so you should not be hesitant in asking if you are qualified as long as you think you have a clean driving record to support it. Also remember that if you end up getting in a collision while you have this discount, it will be incredibly difficult to maintain or regain the safe driving benefits and you will most likely see an increase in your auto insurance rates for at least for the first few years. If you ever get a ticket, driving school may also help lowering your auto insurance rates or at least may excuse you from paying your ticket.