Basic Tips to Lower Your Auto Insurance
Posted: January 28, 2010
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"Isn’t this insurance bill higher than last month’s bill? What's going on?"
Auto insurance is a necessity; you just can't drive without it. Most of us live in a state where car insurance is simply the law. But overpaying for your auto insurance...that’s a choice, and you can avoid it.
Fortunately, as military, you have access to
discount auto insurance. It’s the industry's way of rewarding you for your military service, and responsible behavior. These days, maintaining a good
credit score may help to lower your auto insurance rates even farther.
What goes into creating your auto insurance rates, and what can you do to keep auto insurance costs down?
AUTO INSURANCE PREMIUM FACTORS
Factors like age, sex, car type and driving record have always been key elements in determining auto insurance premiums. But one unexpected factor may be adding to your auto insurance and weighing it down: your credit score. Auto insurance carriers are now checking credit scores because it has been shown that those with poor credit are more likely to submit auto insurance claims. People with poor credit may not have the means to manage the costs of auto accident damage any other way. Even if you have stellar credit, some auto insurance companies place more value on your credit score than others, and factor in your credit accordingly. Shop around and you may find variation in auto insurance quotes among companies that do ask for your credit score.
But auto insurance is all about the numbers. since auto insurance companies are aware that people with less-than-perfect credit numbers simply tend to have a higher probability of claims, manage your
credit report and do some
credit repair if necessary before getting a quote for auto insurance.
LENDING YOUR CAR IS BAD FOR YOUR INSURANCE
Many people let someone borrow the car for a short time; a friend or relative needs a car for the day, or you’d rather let someone else drive while you sleep in the back seat. Wake up: lending your car to the wrong person can be a big financial mistake.
If you lend your car to someone who subsequently gets into an accident, your auto insurance company might not cover your claim. Pay close attention if you have your military kids named on your auto insurance policy as driver: kids often let their friends drive the car for just about any reason at all. As a rule, only the names of insured persons should give permission and then, only infrequently.
SPEEDING RAISES PREMIUMS
The amount of speeding tickets you get has nothing to do with your driving a red sports car, but it does affect to your auto insurance rates – and your ability to maintain your auto insurance policy.
Some insurance companies have a limit of two speeding tickets or less within a three year period. If you reach three speeding tickets, you've moved yourself out of their underwriting guidelines and they won’t renew your auto insurance policy. And once your tickets (or accidents) build up, some auto insurance companies will drop you altogether, simply because you're too high a risk.
NO-FAULT ACCIDENTS DAMAGE YOUR INSURANCE
Hitting a deer or being rear-ended more than once can also impact more than you car; it can affect your auto insurance. Even if there's no fault found in your accident, the fact is that your claims cause your insurance company to lose money…and thus, you may lose your insurance policy. Don't lie to your auto insurance agent about your accident history to get a lower rate. Your agent looks up your driving record instantly. If you've lied, the agent may decline to cover you at all.
DANGER ON THE ROAD
Drivers who talk on their cell phones and send text messages can be deadly to themselves and others. Your auto insurance company doesn't look kindly on this dangerous road behavior and tickets for these offenses can negatively affect your insurance premiums. Many states have made it illegal to use your cell phone while driving and if you’re fined for doing so, your auto insurance may even drop you from coverage altogether.
CORRECT AN OVER-INSURED POLICY
Always make sure to know what your current car insurance policy covers. You may have coverage that you don't need like windshield replacement or towing. Adjust your auto coverage to receive the auto insurance you need, at a price that suits your military budget. And, if you have improved your credit score since your last auto insurance policy quote, have your insurance company requote your policy based on your higher credit score. You may just be pleasantly surprised next time you open your auto insurance bill.
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