Things You Need to Know about Auto Insurance Rate
Written by Gloria zhu   

With numerous insurance companies all selling different quotes, you can’t help but ask, “Is one coverage better than another? Which one is the best value for you?”

Insurance premiums can vary quite a bit. This is because auto insurance is such a highly competitive business and they all aim to gain your business. Ultimately, one of the most effective ways to reduce insurance costs is simply to shop around. However, always remember value. You should look for an insurance company that has a competitive price and can provide you with excellent service.


Rate Factors

The Car Itself: Is it a sports car or is it a minivan? Cars that are made specifically for speed have higher premiums because they are have a higher occurrence of theft, usually driven faster and can cause more damage in an auto accident.

Also, the year of your car model may cause higher rates the newer it is. This is because newer cars are more expensive to repair.

How You Drive: Do you drive at least an hour everyday or only twice a week? The longer your car is on the road, the more “exposure,” or mileage, means that you may have a higher premium because of your increased chances for an accident.

Where You Live: Your environment can help determine the chances of theft or vandalism. For example, there are more chances of these events happening inside a city where there are more people. This increases “more exposure” and causes your premium to go up.


4 Easy Tips
  1. Continuity: If you let your policy lapse, you may pay more in the long run. This is because when you let your policy lapse, most insurance companies view this as irresponsible. To avoid this, make sure that you purchased a new car insurance policy before your current one is cancelled.
     
  2. Discounts: Like with many things you can purchase, insurance companies also offer auto insurance discounts for thing such as a safe driving record, car safety features, anti-theft devices, electronic payments, payment in full, and more.
     
  3. Combine: You can lower your car insurance rate by combining policies. The reason for this is because insurance companies will take all the policies they can get and can offer a lower auto insurance rate if you give them more business.
     
  4. Options: Sometimes, some of the most helpful coverages are the cheapest. Doesn’t make any sense? Optional coverages such as gap coverage, roadside assistance, rental reimbursement, uninsured/underinsured motorist coverage, and comprehensive coverage can provide a lot of protection for just a little price increase. Although comprehensive coverage is usually the most expensive of the coverages offered, it is usually about half the price of collision coverage and a third the price of liability coverage.


Last Updated on Tuesday, 28 December 2010 00:11