Things to Know When Shopping For Auto Insurance | Things to know About Auto Insurance
Ever wondered how insurance premiums are set? For some, insurance premiums are a just random number. This is due to the fact that insurance premiums vary from one company to another. The truth is that auto insurance premiums are contingent on a number of controllable factors and uncontrollable factors.
Factors within your control are driving record, driving sobriety, observation of speed limit, concentration while driving. Factors not within your control are age, residence, school history, employment status, credit history, etc. The fewer risks you take behind the wheel, the more likely you are to avoid having an accident which will certainly cause your car insurance premiums to increase. This article is all about things to know about auto insurance whe shoping.
Car insurance premiums are always made up of different coverage components. These components are liability coverage, collision coverage and comprehensive coverage. It is imperative that you understand what each of these mean and the level of coverage for each you should have.
- Liability coverage covers the damages you are responsible for because of an accident. Most states require all drivers to have a minimum amount of liability coverage by law.
- Collision coverage covers damage to your vehicle if an accident occurs.
- Comprehensive coverage covers damage to your vehicle that is not accident related.
Collision and comprehensive coverage are not mandatory but strongly recommended. Don’t settle for the minimum auto insurance coverage required by law. The more autos insurance you buy, the cheaper it is. Meaning you can get significantly more insurance coverage with just a small increase in your premium.
Some risk factors determine how much you will pay for auto insurance. Gender, age, occupation, driving record, vehicle type, and residents are just some of the factors considered when obtaining auto insurance quotes. Also, your past accident and theft statistics help insurance company determine the probability of you filing a claim. For instance, if you have a clean driving record with no speeding tickets, insurance companies think you are less likely to be involved in an accident. Therefore, your auto insurance quote will be lower than someone who has one or more speeding tickets.
There are some tricks that can help you get a lower auto insurance quote.
- Shop Around: Don’t get auto insurance quotes from only one insurance company. While most companies use similar methods to determine premiums, there is a lot of competition for your patronage in the industry. Premiums for the same coverage can vary by hundreds of dollars from one company to another.
- Request for Discount: Many insurance companies will give you a discount on your auto insurance premium if you purchase another form of insurance such as homeowners insurance or life insurance from them. Also, if you have anti-theft devices or additional safety features installed on your vehicle you may also qualify for a discount.
- Purchase a Higher Deductible: If you need to lower you premium further, consider getting a higher deductible.
- Pay your premium in installments: Paying your premium in fewer installments can also save you money.
While changing policies can help you save, it’s important to never leave an opening in your auto insurance when you do. Before you cancel an auto insurance policy, make sure you have another one activated. That way you will always be covered, and you can avoid any penalties your state might impose.
so, these are the basic things to know about auto insurance when shoping for one.