THE 10 BEST REASONS WHY YOUR AUTO INSURANCE PREMIUMS ARE SO HIGH
When I lived on Capitol Hill in Washington, DC, it seemed like every morning I saw another car with a broken window, a looted interior, and a missing stereo. After moving to sunny San Diego, California to enjoy a slower-paced, beach lifestyle, I expected certain living costs to drop. Surprisingly, my auto insurance premiums went up. San Diego turns out to have a high theft rate, and due to our proximity to the US-Mexico border, recovering stolen cars can be challenging. Hence the higher auto insurance rates for everyone.
Zip code is a factor in determining auto insurance rates. But many other variables also come into play. These are some of the most common culprits and what you can do to overcome them.
10. YOU ARE NOT SETTLING YOUR POLICIES
Some insurance companies will give you a multi-line discount if you have homeowner’s, life, or other auto policies with the same company. The more you have, the cheaper the total price can be.
What you can do: Consider taking out other policies or transferring existing ones from other companies.
9. YOU HAVE CANCELED MORE THAN A FEW TIMES
Failure to pay your bills or failure to provide the insurer with the requested information may result in cancellation. And, in addition to fines from your local motor vehicles, your premium may increase, as it is considered unreliable and a future risk.
What you can do: Open all mail from your insurance agency. If you can’t figure out any of the notices, call for an explanation. And if you are one of those people who always forgets when bills are due, set up automatic payments through your insurer or your bank.
8. YOU HAVE FULL COVERAGE WHEN YOU SHOULD HAVE LIABILITY ONLY
As a general rule, newer cars should have full coverage that covers both you and the other party in the event of an accident. «Liability Only» ensures that the other party is covered, but pays nothing for their own repairs. Your repairs will always be covered by the other driver’s insurance when the other driver is found to be at fault. However, in the case of a car accident (you hit a pole, for example), you are alone.
What you can do: That 1992 Mazda, while you’ve seen it in good times and bad, is probably not worth fixing, so why have full coverage if you just throw it out? Also, if you are an excellent driver, you are unlikely to suffer damage that you are responsible for repairing. Carefully consider the value of the vehicle, the likelihood of repair, and whether coverage is worth paying for.
7. YOUR INSURER THINKS YOU DRIVE MORE THAN YOU REALLY DO
When you insure a car for the first time, its mileage is used to calculate how much you drive annually. People who travel long distances each year have a different rate than drivers who use their car infrequently.
What you can do: Calculate how much you actually use your car each year and provide that figure to the auto insurance representative. Be as accurate as possible and check the odometer again in a year to test or adjust your prediction.
6. YOU HAVE NO LEGACY
This means that you have no history with the insurer. Some insurers allow parents to pass on their policy history to children, allowing the younger generation to take advantage of significant discounts.
What you can do: If you were included in your mother’s policy 15 years ago, let the agent know before getting the quote.
5. SOMEONE IN YOUR POLICY IS CONSIDERED A YOUNG OPERATOR
Depending on the type of car and its safety rating, the cost of letting your teen drive a car in your home may be what it takes to finally force him to get that summer job.
What you can do: Instead of including your son or daughter in the policy as the main driver of one of your cars, ask them to appear as occasional operators. Also ask your agent about any discounts or programs that may apply for young drivers, such as a good discount for student teens who maintain excellent grades.
4. YOU HAVE MADE CLAIMS THAT RESULTED IN BIG PAYMENTS
With some insurers, a large payment for an accident or theft, whether it’s your fault or not, can generate a higher premium.
What you can do: File claims only for what was stolen / damaged. Do not use a legitimate claim as an opportunity to update or lie about what was lost. And to cover your bets, if an accident wasn’t your fault, make sure it’s on your records as «no fault».
3. YOUR ADDRESS HAS A TRACK RECORD OF LOSS-RELATED INCIDENTS
Companies divide cities into certain zones and use accident, vandalism, and theft rates to put a price on their premium. Living a block from a busy intersection where accidents are frequent or in a neighborhood that had an avalanche of burglaries can affect its price greatly. What you pay every six months in rural Illinois may be what you pay monthly in urban New Jersey.
What you can do: Nothing, unless you want to do intense research and move to an area that you know has fewer accidents. Densely populated places will always be higher.
2. THE SAFETY DISCOUNT ON YOUR VEHICLE HAS BEEN REMOVED
This has nothing to do with the actual driver, but rather the cost of repairing your specific make and model of vehicle across the board. If the company finds that more claims are being made related to your vehicle type and / or the cost to repair your vehicle type increases, your premium will increase. This helps explain the mystery of why some cars are more expensive to insure in red or black than white.
What you can do: absolutely nothing.
1. YOU HAVE A BAD DRIVING RECORD
This is why an insurance company needs your address and driver’s license number, so they can assess your potential risk. However, some providers, when they give you a quote for the first time, don’t search your history until after you sign up with them. This means that if you have some accidents and fines out there and they were not spotted up front, your premium will increase when it comes time to renew.
What you can do: Always ask the person who quotes you if they are using their record to determine your price. Improve your registration. And if you have an accident that is NOT your fault, make sure it is presented as a «no fault» accident.
