If you feel befuddled by car insurance, you’re not alone. There’s a lot to get to grips with, and a lot of aspects that even experienced motorists don’t understand.
To get you back on track, here are important car insurance facts which will transform your ownership experience, and save you money too!
You’ll pay more if you have bad credit
Frustrating though it may be, having a low credit score could mean that your car insurance premium is more expensive than people who’ve got sturdier financial foundations.
There are some states in which credit score is not legally allowed to be used as a factor in calculating car insurance costs, but for most drivers in the US it’s an unavoidable reality.
Because of this, improving your credit score is sensible. The good news is that insurers are usually required to tell customers if they’re being charged extra specifically because of having bad credit, so you don’t have to be left in the dark on this matter.
Back in the mists of time, you’d have to contact insurers directly to request a quote, or go through a bricks and mortar broker, paying fees in the process.
In the digital age, online comparison tools let you get cheap auto insurance quotes that suit your needs in just a few minutes. This saves you time as well as money, and makes accessing tailored cover a possibility for all motorists.
It’s not unusual for drivers to assume that if they choose a more expensive vehicle, they’ll end up paying more for insurance, because surely when a claim is made the bill to repair or replace a luxury model will be bigger, right?
Well, it’s a little more complex than that, and insurance providers are more interested in how claim stats reflect on car choice, and less concerned about the sticker price of a given model.
For example, cheap cars which are easier to steal, or more frequently involved in accidents, can be hit with higher premiums than costlier, newer models that have a better track record for being picked by safe drivers.
Deductibles are common in all insurance products, and the idea is that providers will only pay out if you agree to cover a certain amount of the costs of a claim.
Increasing your deductible on car cover can make a major dent in the premium price you pay. So if you are happy to take the added risk that this involves, moving from a $100 deductible to $500 or more might save you between 15 and 40 percent.
Obviously you’ll be taking more of a financial hit if you do need to make a claim. But the upside of cheaper insurance now could be worth it.
This is both a good and bad thing, but generally speaking your insurance will remain in effect no matter who’s behind the wheel of your car.
On the one hand, this means if you want to lend your car to someone in your social circle, you’ll still have adequate protection. On the other hand, if they get in an accident, then it’s you who’ll be stuck with paying the deductible when making a claim, and your record that will get besmirched.
So as you can see, there’s lots to think about when choosing car insurance, and it’s crucial to take the selection process seriously if you’re after a good deal.