Auto Insurance Rates Explained
What can you do to help lower your auto insurance rates?
There are many things that can increase or decrease your rate.
The most important of these items are:
How you pay your bills
If you don’t pay your bills then you aren’t likely to pay your insurance bill either.
Almost all companies use this as a factor now.
Paying your bills on time will help you get a much lower rate.
Your driving record
Accidents, DUI’s, speeding tickets and other violations will definitely raise your price for 3-5 years.
You pay for having the item on your record and you may lose any safe driving discount the insurance company has.
How many claims you file
The more claims you file, the more money you will pay for your insurance.
What else can increase your rates?
Your age and gender
It has been proven over and over that younger drivers, especially teenagers, have more accidents.
Age is definitely a big factor in your rates.
Where you live
If there is higher crime rates in the area you live, your insurance rates will be higher.
What car you drive
– the newer the car, the more you will pay. If the type of car you drive costs more to repair than the average car, you will pay more.
If your car has a crash test rating that shows it has more damage in an accident than the average car, you will pay more.
If the type of car you drive is high on the list of the most stolen cars, you will pay more.
So how do you help lower your insurance rates?
Pay your bills on time.
Do not file small claims.
Buy a car that is either older or has a better crash rating.
Live in an area with better crime statistics.
Have higher limits on your policy.
What type of discounts can you use to lower your rates?
1. Put all your cars on one policy
– Most insurance companies offer a discount for multiple cars on one policy.
2. Put all your policies with one insurance company
– Many companies offer up to a 25% discount for putting your homeowner’s insurance policy and auto insurance policy with the same company.
You can also get discounts when you package your umbrella policy, landlord policy, renter’s policy, boat insurance policy, RV insurance policy and motorcycle insurance policy with the same company.
3. Provide your education information to your agent
– Some companies give a discount based on your education level.
4. Provide your work information
– Several companies give a discount based on the type of job you have and the industry you work in.
5. How many miles do you use your car?
– Some companies give a discount if you have low mileage usage each year.
Be accurate on the information you give your agent.
6. How long have you been with your current insurance company?
– Companies use the amount of time you have been with your insurance company as a factor.
The longer history you have with a company, the more stable a client you are.
7. What the car is used for?
– If the car is considered for pleasure use this is a discount.
This would apply to people who are stay at home parents, work from home, retired, or the car is an additional car, not one you primarily drive.
If you use the car for a work commute then it depends on the amount of miles you drive it.
The car is considered for business use if you are a realtor, sales, etc. where you drive most of the day for business purposes.
8. Amount of coverage you have
– Some companies use the amount of coverage you currently have as a factor.
The higher liability limits you have the better customer you are considered and the lower your rates may be.
9. The payment plan you choose can lower your rate
– Many companies give up to a 26% discount for paying for the policy in full for the term. Your next best discount is doing electronic withdrawal from a checking or savings account.
Doing payments by mail has the highest service charge per payment.
10. Electronic monitoring devices
– Some companies are now offering for you to install a small monitoring device in your vehicle.
This will monitor your driving habits such as speed, hard stops, and time of day you drive.
They usually are used for about 4 months.
At the end of the monitoring time if you are determined to be a safe driver you get a discount.
11. Discounts for youthful drivers
– Companies often give a good student discount.
Children must have a B average or better.
Some give a discount for having taken a certified driving course prior to getting your license.
Others give a discount if the student is more than 100 miles away from home, such as a child away at college.
12. Safe driving discount
– Most companies give a discount if you do not have any accidents or moving violations in the last 5 years.
Here is some bad advice that we have heard from other insurance agents!
1. Lower your liability limits – Insurance is designed to protect you from large financial losses.
These limits are important.
2. Remove optional coverages such as rental car coverage, roadside assistance and gap coverage.
80% of your coverages are to satisfy the state and your bank loan.
The rest of the coverages are what help you pay for your expenses and make your claims go smoothly.
They are also low cost options.
3. Increase your deductible – Odds are if you are having trouble financially you would not be able to pay a higher deductible in the case of an accident or other claim.
What’s my best advice?
Be up front and give all the information I ask for.
If I recommend coverage, it is meant to help you.
Sondra Wendt – 623-297-1475
EZ Insurance Solutions