Advice On Keeping Car Insurance Premiums Low

Trying to keep your car insurance premiums from going up can be like playing a game for which no one tells you the rules. One important factor is your credit. Insurance companies will check your credit score, because studies have shown there’s a direct relationship between a person’s credit score and the odds you would file a claim. If you’ve had good payment histories on your credit accounts and don’t open and close accounts frequently, you present less of risk to the insurer. This is evidence to them that you are dependable and stable. This is a major factor in determining your insurance rate.

Car insurance companies calculate your overall risk level by taking into account things like your driving history, your age, the type of car you own, and your credit score. There’s no way to find out for sure what they rate you as, but you can look at the same things they look at and then make a reasonably good educated guess at your risk level. The first thing to do to save on your premiums is to remember these things when you’re first shopping for a car or an insurance policy. By buying less flashy, subdued car models, you reduce your risk. Buying insurance only when you have a good credit rating is also a very sensible idea. You don’t want to be stuck with awful premiums because of a temporary slump in your credit rating, do you?

To keep premiums down, you might try filing claims on certain items on your home insurance, rather than your car insurance. Most home insurance policies have allowances for small inexpensive items like CD’s. Filing accident claims on your car insurance will likely raise the rates you pay. For instance, if you get into an accident that was determined to be your fault, your premium will likely increase by 40%.

Note: Accident “forgiveness” – some auto insurers offer a first accident “forgiveness”; they will not increase your premiums for your first accident. Check with your company to see if they offer this coverage and how you can qualify. Did your friend borrow your car and have an accident? You’ll have to file a claim unless their own insurance covers them. If they are uninsured, and the damages exceed your coverage, the injured party may take legal action against you for damages and injuries. On the other hand, if your friend did not have permission to borrow your car you won’t be held liable in many cases.

Each auto insurance company figures the worth of a vehicle in a different manner. All of them keep their own lists of car values (like the Blue Book list). Some companies may ask local car dealers what they’d charge for a particular vehicle. Gap insurance might be worth purchasing, as it might pay the difference between what your insurer will pay and what you actually owe. Keep any maintenance records you have, especially of oil changes and routine checks by a qualified mechanic, or special parts, or upgrades. These will be factors in figuring what gap insurance will pay.

If you get into an accident with an uninsured motorist, and he or she is at fault, then if you hold multiple car insurance policies you might try to “stack” them. “Stacking” refers to collecting from multiple policies for the same incident. Check the language of each of your insurance policies to see if they allow stacking. If you have UM/UIM coverage on more than one car insurance policy, then you can likely make claims under each until you have recovered 100% of your damages.

If you find another car insurance company that offers better deals, you can switch to them. This means telling your old company to cancel your policy. This is a simple procedure, and all you have to do is notify your old company in writing on the date you’ve chosen to cancel. Just be sure to have the newer policy ready to go as soon as you cancel the old one! If there’s a gap, then you’ll be uninsured for a little while, and getting into an accident during that period of time can be a total disaster. Shop safe and smart and you’ll have no regrets about this simple procedure.

Susan Reynolds is the webmaster for a leading South African Insurance Provider who specialises in Car Insurance.

categories: Car Insurance,Cars,Automobiles,Insurance,Personal Finance,Vehicle Insurance