Factors That Impact Your Rates
In addition to the specific coverage options that you select, other factors that affect your auto insurance rates include the following:
-Deductible: This is the amount of money that you pay out of your own pocket if you get in an accident. The higher your deductible, the lower your insurance bill. In general, a deductible of at least $500 is worth considering, as damage to your vehicle that comes in at less than $500 can often be paid without filing an insurance claim.
-Age: Younger, less experienced drivers have higher insurance rates.
-Gender: Men have higher rates than women.
-Demographics: People living in high-crime areas pay more than those living in low-crime areas.
-Claims: Accident-prone drivers pay more. If you want to keep your rates low, keep the number of claims that you file to a minimum.
-Moving Violations: Speeding and other moving violations all have a negative impact on your insurance bill. Obey the law to help keep your rates from rising.
-Vehicle Choice: Sports cars cost more to insure than sedans, and expensive cars cost more to insure than cheap ones do. Looking into the cost of insurance before you purchase that new car could help you save a bundle on your car insurance.
-Driving Habits: The number of miles that you drive, whether or not you use your car for work, and the distance between your home and work all play a role in determining your rates.
-Theft Deterrent Systems: If you have an alarm on your car, you’ll pay less to insure your vehicle.
-Safety Devices: Air bags and anti-lock brakes both work in your favor by keeping you safer and lowering your insurance bill.
-Accident Prevention Training: Some companies offer discounts if you take a driver’s education training course.
-Multiple Policies: If you have more than one car and/or also have homeowner or renter’s insurance, keep in mind that many insurance companies offer discounts based on the number of policies that you have with them.
-Payment Plan: Some insurance companies offer discounts based on your payment plan. Paying your entire yearly bill at one time, instead of in installments, may lead to a discount.
-Credit Score: Good credit lowers your car insurance rates. Bad credit increases them. (To learn more about this process, see Insight Into Insurance Scoring and The Importance Of Your Credit Rating.)
When you’re in the market for car insurance, careful shopping is a must. Prices, features and benefits vary widely from company to company. Minimum coverage requirements vary too. In Florida, for instance, the minimum coverage requirements are $10,000 for personal injury protection and $10,000 for property damage.
In the personal injury department, $10,000 dollars doesn’t buy much in the way of medical services should an operation or prolonged stay in the hospital be required. The same is true when it comes to personal property, as there are many sport utility vehicles and luxury cars that are priced well above $30,000. Therefore, protecting your financial assets in the event of an accident is likely to require far more coverage.
Comparison shopping is always a smart thing to do, and there are many websites designed to help consumers compare insurance policy prices. Insurance agents can help too. Independent agents often offer policies from multiple carriers and can help you find the policy best suited to your needs. Before you eschew an agent in favor of an online provider, think carefully about who you are going to call after you have an accident. Your agent has an incentive, in the form of your repeat business, to provide good service, while an online service may come up short.
Before you buy a policy, research your policy provider – regardless of who it is. Numerous firms rate the financial health of insurance companies, and your state also has an insurance website that rates firms based on the number of complaints they have received. (For a comprehensive list of state insurance regulators, visit the Federal Citizen Information Center.)
Shopping wisely can help you protect your health, your assets and your wallet, so put forth the effort to determine the type and amount of coverage that you need. Also make sure that you review and understand your policy before you sign on the dotted line. If you plan well, you’ll be pleased with the results, should you ever find the need to put your policy to the test by making a claim.
For related reading, see Wheels Of A Future Fortune.