There are a few myths about auto insurance rates. It is best to know how they work as this affect consumer decisions. Many motorists lose money because they believe in things that are not correct. On the other hand, many people save money because they test the questions they have. Check their options and confirm their suspicions.
Vehicle Insurance Premiums Can Be Substantially Different Among Insurer
For example, many people think that car insurance rates are set by state insurance departments and therefore it would be the same regardless of whichever company you apply. This is a totally false belief that can cost you hundreds of dollars every year. Each company determine their prices based on unique formula they use. The premiums can be as much as couple of thousand dollars different in some cases. So, never accept the first premium offered to you. Shop around carefully until you are fully satisfied with the costs and coverage.
What Are the Considerations that Affect Your Rates?
Age, gender, cars insured, claims history, driving records, credit score, annual mileage, marital status, home address and profession are some of the key factors affecting your quotes. These are not in the order of importance or carry the same weight. Some factors like age can be real important if you are below 25 years of age. However, it may not make a huge difference between the age of 30 and 40.
Every company weigh each factor differently. For example, company A may pay extra emphasis on credit score while company B would care more about your claims history. Just because you got a high premium from one of them does not mean that you should pay high rates. There are many other companies to check with before making your mind. Remember, you may save yourself good several hundred dollars in the process.
Who Gets the Cheapest Car Insurance Rates?
The best way of looking at it is to make a comparison as below
- Ladies generally get lower rates than the gentleman.
- Drivers get considerable rate reductions when they reach the age of 25. So, young drivers would need to gain some experience before they can claim the highest discounts.
- Drivers with safe cars pay a lot less than the drivers with sports cars and older model automobiles. If you are planning to buy a Porsche for your teenage child check if you can get insurance first.
- Drivers with at least three years of no claims and no traffic tickets can claim considerable discounts with most insurers. One claim can wipe away these savings. Second and third accidents in one year can make it difficult to find insurance coverage. It would not certainly be cheap.
- Motorists who live in city centers pay a lot more than country folks. This could be several times more in some areas. Adding the cost of parking and unavailability of it, owning cars in the metropolitan centers can be real costly.
- Increasing your deductibles can reduce the premium. This is one option if you want to buy more coverage but cannot afford it.
- Having a good credit score can help you save on car insurance.
- Traffic moving violations are seen by auto insurers and affect your rates considerably. You may be refused coverage if you have a DUI by most companies.
The more discounts you qualify the lower your auto insurance quotes get. If you ignore these points you can end up paying high premiums for the choices you made in your driving life.