Navigating the Auto Insurance Maze

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For those who are not in the business, the nuances of auto insurance have never made sense. These are the basics of what determines your auto policy’s rate, and how you can save money.

There are many factors that you and your agent must consider when it comes to auto insurance. It can sometimes be confusing or overwhelming. You may be offered a rate that is too low for your vehicle, while others will offer you a very high rate. We’ll discuss the factors that determine these rates and how you can lower them.

Your location is the most important factor in many states. It determines your safety and risk levels when you commute or travel. California is one example of a state that places limitations on how your location can impact your policy. California rates are determined primarily by your driving record and your mileage. However, your location is also important. Multiple national providers have aggregated data that has shown that even a 50-100 mile difference can have a significant impact.

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Relocating to lower auto insurance rates for most people is not an option. However, every person’s situation is different. If you are in this position before renewal, it might be worth considering. If you are thinking of moving soon, consider the insurance rates as a factor that could impact your cost-of-living.

Your driving record is another important factor. Your driving record will determine your rates, no matter where you live. There is not much to recommend other than to be safe on the roads. Accidents are inevitable. However, if you drive safely and defensively in urban areas and other dangerous places, you can minimize the risk you face every day. If you are eligible, most companies offer discounts and incentives for safe driving records. This could save you hundreds of dollars each year.

The type of car you drive can be one of the most surprising factors. Despite this being obvious, even the most basic car can have unexpected rates. You would expect a premium for an expensive import or high-end sports car, but not for a sedan. Rates are determined not only by the cost to repair the vehicle in an accident but also the vehicle’s history of loss. This means that if there are many claims against a particular vehicle, it will be more expensive even though the vehicle is safe.

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We are back to the point where each individual’s situation is crucial. Some people prefer to rent the latest model, as they don’t want to own a car. This will ensure that their premiums are higher. Some people do everything they can to keep their cars used as long as possible. This will cause rates to drop as the risk of an accident decreases. As part of your ongoing cost to own a car, it is important to consider the insurance rates if you are able to purchase a new one.

There are many other factors that can affect your life, and these few examples only scratch the surface. Talk to an insurance agent about your specific situation and request a quote. After you have done this, don’t hesitate to ask for quotes from three, four, or more providers. Because everyone calculates their rates differently you won’t know if your pricing is the best without doing some research.