Many individuals think that they are reasonably well-informed regarding auto insurance, particularly in the context of their own needs. They pay their premiums promptly; they keep coverage limits that reflect their circumstances; and they’re informed about the process of filing a claim. However, many individuals will be surprised to find out there are lots of points that can impact their coverage’s, and the rates they pay for them.
Intrigued? Listed below, we will share 7 points regarding auto insurance you might find startling. The following details have caught countless customers by surprise.
#1 – The Type of Car You Drive Impacts Your Rates
It is an area that is confusing by a many customers. The color of your vehicle makes no difference. Neither does having a fin installed on the back. What matters is the claims and safety record of the certain make, model and year.
When insurance providers have paid a high number of claims to customers that drive a similar car you drive, your rates will probably be higher. The opposite is also true. Vehicles that show less claims, and pose an outstanding safety record, would be less costly to insure (additional factors remaining equal).
#2 – You May Be Wasting Money on Coverage
Some coverage’s are required while some are optional. Collision and comprehensive coverage’s fall under the second category. For newer cars, both are suggested as substantial damage or loss as a result of theft pose substantial repair or replacement costs. For older cars, however, collision and comprehensive are harder to justify. The amount you will pay to have these coverage’s will probably exceed the value they provide.
When your vehicle is old, and its market value is low, take into consideration dropping both coverage’s. Your car insurance rates would also drop.
#3 – Raising Your Deductible Reduces Your Rates
This should not come as a surprise. Even so, many individuals carry deductibles that are too low, and therefore pay higher rates than necessary. Given the minimal probability of an incident, it is a wise decision to raise your deductibles to be able to reduce your rates.
One important side note: ensure you put aside funds to pay the deductible in case you have to file a claim.
#4 – Your Policy Could Be Canceled For Late Payments
Do not expect your car insurance company to forgive regular late payments. Many insurers would simply cancel your policy, thus eliminating your coverage. This could make securing coverage elsewhere challenging since other carriers view cancellation warily.
When your insurance company cancels your policy because of late payments, they might be able to reinstate coverage. However, you may be necessary to pay your yearly premiums in advance. A better option is to make timely payments in the first place.
#5 – New Cars Usually Cost Less to Insure
This surprises many people, but makes sense considering the factors related to calculating an individual’s rates. Among these factors are the security features installed on the car, the age of the individual behind the wheel, and obviously, that individuals driving history.
1st, older vehicles are usually driven by younger people, that have a sparser driving history than their older counterparts. This is why younger drivers normally pay higher premiums. 2nd, such cars usually lack high-end security components, that increases the risk of theft. While they are cheaper to replace, do not assume rates are lower by default.
#6 – Your Assets Might Be At Risk
You might think your home and financial assets are covered because of a having car insurance coverage. But have you reviewed your policy lately to be sure this is the case? What will happen when you were involved in an at-fault incident which causes major property damage and injuries? When the cost of both exceed your coverage limits, you will be liable for paying them. Take a look at policy in light of your financial circumstances.
#7 – Rates Differ Significantly From Company To Company
The rate provided by one insurance company might be substantially lower than the rate provided by another for identical coverage’s and deductibles. This is a detail that surprises many individuals that believe premiums are similar for every insurer. In fact, they vary. The best way to know whether you are enjoying the cheapest rates possible for your chosen coverage’s is to compare quotes from a number of insurance companies side by side.
Car insurance is among the least exciting products you could buy. But it is worthwhile to spend a couple of minutes making sure you are well-informed regarding your policy, coverage’s, and rates.
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