Everyone wants to reduce the cost of their car insurance premium. Unfortunately, owing to a lack of knowledge, people often wind up making trivial errors that otherwise might save them a significant lot of money and trouble. However, insurance companies are reluctant to provide this data since they need your premium payments.
But still, by following our tips and relying on a great broker, you can score a great auto insurance quote without too much hassle. These are some of the most important things that your car insurer isn’t going to tell you.
Photo by Sarah Brown on Unsplash
You’ll Pay Less if Your Credit is Good
Many insurers will do a credit check on you. Insurers understand that if you pay your payments on time and maintain a good credit score for a long period, you are more stable than someone who pays late and constantly establishes and cancels accounts. This information is used to build your “insurance risk score,” a component that impacts your car premium.
Although, in certain areas, it is not legal to use credit history when determining the cost of car insurance or coverages. For instance, in the Canadian provinces of Ontario as well as Newfoundland and Labrador, this practice is illegal. Residents in Alberta must provide insurers authorization to do credit checks.
Your Car Type Influences Your Premium
The type of car you drive might tell your insurer a lot about your driving habits and risk profile. Certain safety measures, for instance, may reduce your claim risk but increase maintenance costs owing to their sophisticated engineering.
Theft also influences a car model’s risk rating. Your rate might be higher if your model is often stolen and has no built-in protections against theft. That’s why it’s important to think about the value of a safe car alongside the price tag attached to it.
Your Reckless Driving Will Have Consequences
You may be surprised to learn that insurance companies don’t put the greatest weight on factors like your driving record when calculating your premium. Yet, it’s a crucial piece of the puzzle that insurers need to assess your driver habits and come up with a fair quote.
If you have a history of traffic convictions, no matter how little, it is fair to conclude that you are capable of committing similar offenses in the future. So, a traffic ticket is an excellent risk indicator for forecasting the likelihood of a claim and will result in a three-year rise in your insurance premium. Additionally, your insurance premiums may go up for up to six years if you have “at-fault” claims on your driving record.
The Area Code You Live in Affects Your Premium
Some cities and towns usually have more claims than others. You should expect to pay a higher premium for car insurance if you live in a city or town where residents submit more claims than drivers in other areas.
Using postal code discrimination to assist in deciding rates has been criticized, with some suggesting that personal driving records should be more predictive of claim payments in a specific region. Your insurance premium is still affected by this, and whether or not the law is amended to reflect the true cost of this component remains to be determined.
If you’ve just relocated or intend to do so in the near future, research auto insurance quotes in your new region to secure the lowest possible cost. A provider who hasn’t paid out many claims in your new postal code may offer a cheaper premium than one who has.
When You Move Insurers, You Must Terminate Your Insurance Coverage
It is most likely that your policy specifies that you’re able to terminate your agreement with the insurer by providing written notice of the termination date. Do not fall into the trap of believing that you can cancel the insurance after the coverage period by just ignoring the bill that was sent to you.
That’s not how it will seem to the insurer. They will send you another bill for the subsequent payment of the premium, and if you do not pay the bill when it is due, your policy will be canceled for nonpayment. Your credit score will also be affected.
Final Thoughts
You have the right as a consumer to get the most affordable insurance policy possible for your vehicle. Yet, this, too, requires work. As a policyholder, it is your responsibility to learn as much as possible about car insurance.
To check the reliability of the information presented to you, ask questions. By doing so, you might not only save money on car insurance but also feel more at ease behind the wheel.
