Are your car insurance premiums higher than you can afford? High car insurance rates can be due to having multiple accidents over the last few years, a bad credit score and having an extremely low deductible. In order to make your car insurance more affordable, you need to know the factors that affect your rates. Thankfully, some items that affect your insurance premiums can be found below. All you have to do is keep reading.
1. Credit Score
Car insurance companies consider your credit score. If you have a poor or even fair credit score, car insurance agencies believe that you are at a higher risk of filing a claim then someone who has a good or excellent credit rating. Paying your bills on time and paying off old debts can help increase your credit score.
2. Driving Record and Claims History
How many accidents have you been in over the last three years? Have you received any speeding tickets or DUIs recently? Car insurance companies charge higher premiums when a driver has several traffic incidents on their driving records. They also charge higher premiums to drivers who have had multiple accidents over three years. This is because they believe that the driver has a high probability of being in future accidents and filing future claims. Taking a defensive driving course and being more vigilant when driving can help improve your driving record and reduce your risk of getting into more auto accidents.
3. Types of Coverage and Deductibles
How much car insurance do you have and what are your deductibles? Full coverage car insurance, which includes collision, liability and comprehensive is more expensive than having just liability insurance. For drivers who own their vehicles and maintain fully funded savings accounts, they may not need collision insurance, which pays for vehicle damage regardless of fault. Of course, if you are still making payments on your car or lease your vehicle, you’ll need full coverage insurance. Thankfully, you can reduce your premiums for full coverage insurance by raising your deductible. This is because you will be assuming more financial responsibility for the accident. However, it is extremely important that you choose a deductible that you can always afford.
4. Car Insurance History
Have you had continuous car insurance coverage for the entire time you’ve owned a car? Missing a payment, getting your car insurance canceled and having a car insurance lapse of any duration can cause insurance companies to label you as a high-risk driver, even if you haven’t had any accidents. This may seem like a small oversight, but being classified as a high-risk driver can triple your future insurance rates.
Take Advantage of Discounts
Don’t forget to take advantage of car insurance discounts. Many car insurance companies offer discounts for individuals who have more than one car insurance policy with the agency and more than one car insurance with the same company. They also offer discounts for good students, safe drivers, and accident-free drivers. Some car insurance companies even offer discounts for drivers who pay their entire six or 12-month policy in cash.
When it comes to making your car insurance more affordable, it pays to be vigilant and avoid distracted driving. If you have a fair or poor credit score, take steps to raise your score into the good and excellent categories, and remember to take advantage of all the discounts that are available to you. As you improve these things, you will notice a reduction in your auto insurance premiums.
