Saving on Auto Insurance

The auto insurance industry runs in cycles. For years car insurance rates will hold steady when insurance companies are profitable. When insurance companies are losing money, however, we can experience an increase repeated auto insurance rate increases. When that happens, I am certain you repeatedly ask, “why are my car insurance rates rising? I haven’t had a claim.” There are things that we can do, however, to control our rate of increase.

How do we impact car insurance rates? What factors should be considered?

First, we need to look at driving record. Of course it is always best to have a good driving record. A poor driving record is the number one reason an company will increase your auto insurance rates. Taking a state sanctioned driving class can help result in the reduction of points on your motor vehicle report. Many states (e.g. Ohio, Illinois and Florida) offer these types of courses. Of course slowing down is the long-term answer to keeping you auto insurance premiums down.

Another factor to keep in mind is the type of car you are insuring. In determining the insurance rates, the insurance company considers past lost history associates with that type of car. This is usually correlates closely with the style (e.g. sports car v. minivan), speed of the car, cost of the car, and its safety features.

A sports car will have higher insurance rates because of the frequency of having an accident is greater than it would be for a family sedan. Auto insurance companies also offer discounts for safety related features like airbags, cars alarms, car tracking systems anti-lock brakes and the like. Having these features will most certainly save month on you car insurance, but many of these features may also save your life. So, look for these features in the process of buying a new or used car.

Your credit score is also a big factor in determining your car insurance quote. Insurance companies have statistically correlated low credit scores with an increased probability of accident. It seems that the data says people who are financially responsible tend to drive better as well. So, it seems that spending within your limits and paying your creditors on time will save money on your auto insurance.

Another important factor in determining your premium is to never allow a lapse in your insurance coverage. Going without insurance is against the law and an extraordinarily expensive proposition. First, you will get a huge ticket, secondly, it leaves your personal assets completely at risk in the event the your cause damage in an accident. And, to top it all off, higher loss statistics are associated with not having prior insurance, so you can expect significantly higher rates on your next auto insurance quote. It is just not worth going without insurance.

So, before you purchase a car, talk to your InsureDirect auto insurance agent about the cars you are considering, or get an online insurance quote through InsureDirect. Give us a call to see if we can save you money on your auto insurance.

Disclaimer: The contents of this and all articles provided by Insuredirect.com are for informational use only, as the specifics of any situation will vary with the circumstances. Do not consider the information provided in this article as a recommendation on purchasing any specific auto insurance, homeowners insurance or other type of insurance product, or to provide financial or legal advice. Without exception, all information is presented for information purposes only.

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Rev. V.1 - 10-27-2007