Auto Insurance
Have you ever wondered why your neighbor with the same
car pays less in insurance premiums than you do? There are many factors
that insurance companies base their premiums on, but there are ways
to reduce your rates.
According to a recent survey done in May 2006, it has been revealed
that in the highly cut-throat world of the auto insurance industry,
approximately 1,500,000 prospects are searching the Internet daily
for an auto insurance quote. Auto insurance is fast becoming a booming
business, while getting affordable car insurance has become a recent
phenomenon with the common man.
To reduce the premium amount, first you have to know
the factors asscoiated with the insurance contract. This insurance
contract contains declaration, agreement and conditions. The declaration
contains all the personal information related to the insurance seeker.
In the agreement you will find documentation which include policy
number, type of policy and policy duration. It also includes the policy
limits and any extra coverage that you paid for including PIP, uninsured
motorist and under insured motorist.
Factors you can change:
Type of Vehicle - As you are probably aware and red
Corvette is going to demand a higher premium than a Civic. So be prepared
to pay the premiums.
Driving Record - A person with a clean driving record
is going to have lower premiums than a person with several moving
violations. If possible you should opt for defensive driving or deferred
adjudication rather than pleading guilty and paying the fine. In fact
it may be less expensive to hire an attorney rather than paying the
fine.
Levels of Liability - Certain states have requirements
for the minimum levels of liability that is mandatory. You can reduce
you level of liability to the state minimum to reduce your premium.
PIP - Personal injury protection can be completely
waived to also reduce your premium. I have not had PIP on my policy
for over 10 years with no negative impact.
Claims - While you can not change the past, if it
is a minor accident you would be better off paying for the repair
than filing a claim on you policy. In many instances the repair will
not be much higher than your deductible.
Uninsured/Underinsured Motorists - This is also optional.
You can waive this portion.
Occupation - A outside sales rep or pizza delivery
person is going to have a higher premium than an accountant. Do not
tell your your agent you are using the car for work
Credit Rating - You may not have been aware of this
one. Insurance companies have found a direct correlation between people
with poor credit history and higher risk. Keep your credit history
clear and you demand lower rates.
Geography - A driver living in a rural or suburban area is
going to have a cheaper premium than someone living in an urban are.
People living in rural America are less likely to have their car stolen
or a total loss claim.
Multiple Car Discount - This is the loophole I have
found. Buy a inexpensive car and just get general liability insurance
on it. Tell your agent this is your daily driver, the second car,
your corvette, is your weekend or Sunday drive car.
Theft Detection or Onstar - Most insurance companies
will give you a discount on your premium if you have a burglar alarm
install, either OEM or aftermarket.
Factors you can not change:
Age - The Auto industry has found that most accidents
are caused by the oldest drivers and the very young drivers. If you
have a teen in your household that is of driving age, be prepared
your premium will rise.
Gender - Women are historically safer drivers and therefore
pay less in premiums.
Marital Status - Married individuals
are going to have significantly lower premiums than single people.
This does not mean that you should get married just for the sake of
your insurance premium.
The most important factor in determining your rate is your credit
history. Many insurance companies use this credit score when determining
policies, so the higher your credit score the better your rate. So
keep your credit history clear and up to date.
