Insurance costs can sometimes rise and much faster than the rate of inflation. Read on and we will look at some of the reasons why those rates are so high.
Your Credit — Did you know that your credit score can impact your insurance premium? If your credit score has fallen in recent years due to financial problems, late payments to creditors or other challenges, your rate will rise. Insurers have found that there is a correlation between lower credit scores and claims. People with lower scores tend to file more claims, costing insurers money. Work on raising your credit score by fixing your credit problems.
Your Deductibles — Your personal deductibles have not changed, but the value of your cars has fallen too. So, why are your rates higher? Because your state approved your insurer’s request for a big, fat rate increase. Notably, at least one of your cars is quite old, but still has collision coverage. Drop that coverage and your rate will come in lower.
Your Coverage — Besides your deductibles, there may be other thing on your insurance policy that is driving up your costs. Medical coverage is a cost you might possibly do without, as you already have health insurance at work. If you are paying for traveler’s insurance or auto rental, those expenses may be unnecessary. Moreover, your credit card issuer may already have your covered. Watch out for duplicate coverage — get rid of what you do not need.
Your Discounts — Are you getting every type of discount that you have coming to you? If not, you are paying more for insurance than you should. Most insurers reward their customers with loyalty discounts, shaving about 5 to 10 percent off of the overall premium. If you are a safe driver, own a car with a security system, have safety equipment installed or belong to an organization or association that gets discounts, then it is time to ask your insurance agent for a review. If your rate does not come in much lower, then it may be time to shop around.
Your Drivers — Adding new drivers to your policy will drive up your auto insurance rate. You cannot do anything about this unless you move that driver to a separate policy. If the new driver is young, your rates will reflect that lack of driving experience. Moreover, you will probably pay more if your insure this individual separately. This is one area where lowering your rates just may not happen.
Your Driving — How has your driving been lately? Your spouse? All it takes is one ticket and points reported to your auto insurance company to raise your rates. If you have six or more points, you may be able to get these reduced by taking and successfully completing a state-approved driving course. Many states have them and will shave up to three points off of your record. Your insurance rates will fall with it.
Your Address — Did you move within the past six months or year? If so, your auto insurance rates are tied directly to where you live. Insurers base premiums upon risk. If your new neighborhood has greater incidences of car accidents or vehicle thefts, guess who will pay for that? That’s you and there may not be much that you can do about it.
Reviewing your auto insurance policy whenever it comes up for renewal can help you track changes as these occur. If you have questions about a rate increase, contact your agent to discuss. This individual may find other ways for you to save. If not, shop around to compare different policies and make a switch if it is worth it to you.
Jeff Mathis is an auto insurance expert. His aim is to guide you through the jargon and ensure you secure the very best deal. Learn more about the best rates from AutoInsurance.us.
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