Even if we are happy with our car insurance coverage, it is a
good idea to shop around occasionally to see if we can get a better deal on
price or coverage. On average, between 15 and 25 percent of people shop for new
auto insurance annually. Most insurance companies report customer retention
rate in the upper 90th percentile.
Drivers may be paying too much for their motor vehicle
insurance. There are several factors affecting car insurance premiums. These
include:
The type of insurance and the coverage needed. Even though it
may be boring to shop for car
insurance online, it is the single best way to lower your premium. Since
insurers use different factors and formulas to rate risk, prices can vary a
great deal between companies.
With all these price differences, it helps to use your
computer to sort through and identify all the best policies and quotes based on
your personal needs. It is a good idea to do an online comparison at least once
a year. The best time is right before your current insurance renews. Another
good time is when a driver falls off your policy or if a ticket or accident is
removed. You may also want to shop around for new insurance if you move, get
married or add a driver.
Today, almost all insurance companies use your credit score
to help determine your premium. The only state where this practice is not
allowed is California, Massachusetts or Hawaii.
Age and birth date are also important factors in determining
your insurance premium. If you are younger or older than the average driver,
your insurance rates may be more expensive.
Marital status is another factor insurance companies use to
determine your insurance premiums. If you are married, insurance companies
consider you less of a risk than if you are single. There are even situations
where an insurance company will lower a customer’s premium even if they are
under age 25 as long as they are married.
Vehicle type is a big factor in the amount of your insurance
premium. If your vehicle is more likely to be stolen or if you use it in any
type of commercial practice, your insurance company will factor in this
information and it may result in a higher premium.
The number and age of the licensed drivers can also impact
the cost of your insurance premiums. It is important to tell your insurance
company about all the licensed drivers in your household, even if they do not
drive your vehicle. This is because the insurance company may deny a claim if
someone not listed is in an accident while driving your car. As soon as a teen
in the family gets their license, they should be added to the policy.
The driving records of these drivers are also an important
factor to insurance companies. If you or anyone driving your vehicles has a
record with tickets or accidents, it can significantly raise your rates.
These are the primary factors affecting auto insurance
prices. There may be others depending upon the insurance company, but knowing
and understanding these will help you get started on finding the best insurance
coverage at the best price.
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