We often want to provide ways for our drivers to keep their auto insurance rates low, but that is not always something we can control. Previously, we’ve spoken about what plays a role in what you pay, such as your vehicle and your location. Other things you can control more readily. These are the areas we encourage you to work on to keep your coverage better in line with your budget. Here are the seven most important areas to focus on.
#1: The Way You Drive
More specifically, your driving record plays a role in the costs you pay. No other factor that is a component of your investment makes a bigger impression on your costs than this. Being a safe driver means avoiding speeding tickets and other reckless driving claims. It also means driving with your seat belt on and not violating any driving laws. Any time you get points on your license, you are putting your insurance rates on the line.
#2: The Way You Use Credit
Another factor that impacts what you pay is your credit score. Drivers who have a good credit score are less likely to file claims. They are also less likely to miss payments. Both of these factors are important to your insurance company. Credit scores aren’t always make-or-break in terms of coverage, but they can impact what you pay.
It’s also important to note that insurance companies don’t use traditional credit scores. They build their own scores based on FICO or Experian scores: Basically, companies take your score and use it in their own model.
#3: When You File Claims
You’re in an accident that you caused. You need to file a claim for your damages. That’s okay, that’s why you have auto insurance. However, filing numerous claims can be worrisome to insurers. It may mean that the policy owner isn’t driving safely or perhaps that they live in a higher risk area. In all cases, frequent claims will raise your auto insurance rates in many situations.
If you have had a lot of claims in the past, don’t count on buying your insurance from another company with hopes that they don’t know about your claims history. This is because many companies share claims history with each other through a database referred to as C.L.U.E. (Comprehensive Loss Underwriting Exchange.) A better idea is to try and manage your claims history with strategies such as choosing a higher deductible and taking care of less expensive losses yourself, or by managing your risk though defensive driving techniques and other loss preventative measures.
#4: Your Car
We’ve noted that sometimes you can’t control the car you drive. However, if you are in the market for a new vehicle, choose one with a high safety rating. This is one of the factors you can choose -the vehicle itself. Choose a vehicle that’s safer to drive, lower in overall value, and less likely to be stolen. All of this can help reduce your costs.
#5: Where You Drive
Again, this isn’t always something you can control, but if you don’t drive as much, you can reduce your auto insurance rates. Also note that when it comes to how much you drive, staying off the road by taking a bike, walking, or using a bus, can also be good for the environment. If you drive under 8,500 miles a year, you may qualify for a low mileage discount. This is an easy way to reduce your costs. Just let your agent know how much you are driving.
#6: The Discounts You Qualify for Today
Most drivers plan to purchase insurance, but they don’t always ask questions about what type of auto insurance discounts apply to them. For example, do you have a student that’s a good driver and an A or B student? If so, that can qualify for a discount. Ask about discounts based on your driving record, your claim’s history, and even how you pay your bill.
#7: Your Deductible Limit
Deductibles are a tricky subject. You should have a deductible that is affordable to you -remember you have to pay out of pocket for these costs. At the same time, the higher the deductible is, the lower your premium costs will be.
If you’re still unsure what factors are playing a role in what you are paying, give your team of agents a call to learn more.