Tips For Reducing Your Auto Insurance Rates

Brother, Can You Spare a Dime?

With a son turning 16 years old, I recently experienced the shock of finding out how much it now costs to insure a first-time driver. Based on the quotes I received from our insurance company, one of the leading auto insurers in North Carolina, our premiums would just about double for a six-month period. Having already experienced the cost of adding our oldest son when he got his license 6 years ago, I was prepared for a huge increase. However, I did not remember the rate increase being as much then as it is now.

I began checking with other companies, hoping to find comparable coverage that would be less expensive. Fortunately, I received a quote from another company (the one that has all the funny ads) that was significantly cheaper. Below are some tips and common sense factors to keep in mind concerning auto insurance:

Good Credit is Important

Most insurance companies will check your credit report. Research has shown that there is a connection between credit score and the probability of filing a claim. Long-standing credit accounts and timely payment of bills indicate stability, which is viewed more favorably than the frequent opening and closing of accounts. This information is used to calculate a risk score for a proposed insured and figures into the rate you will pay for auto insurance. If your credit history has been rocky, try to clean it up as soon as possible.

Model of Vehicle Affects Premium

Insurers of autos have a rating system for every vehicle make and model. Factors used in the rating include cost, safety data, and likelihood of theft. When considering a vehicle purchase, consult with your insurance company to get a feel for what the premium will be for your new ride.

Watch for Installment Fees

Some insurers add types of administrative fees for premiums broken up into smaller payments, such as those made monthly. Generally, the more often you pay your premium, the more the fees will be.

Personal Items Not Covered

Auto insurance typically does not cover damaged or stolen personal items. You may be able to file a claim using your homeowner's insurance. Check to see if it is necessary to add a rider to your homeowner's policy to cover items such as laptop computers.

Accidents Cause Rates to Skyrocket

Of course the number one reason that an insurer will raise your rates is for you to have an accident that is your fault. In most cases, your rates will climb regardless of the circumstances.

Loaning a Vehicle is Not a Good Idea

If someone borrows your car and has an accident, you will have to file a claim with your insurance company. You will have to pay any deductible and your rates, along with your blood pressure, will probably rise.