Insurance is generally confusing, no matter what you are taking it out for. If it’s for your car, then you need to be extra vigilant to get yourself the best possible policy.
Bear in mind that insurance companies are in business, and while they may get you sold on the fact that they only have your best interests at heart, don’t have blind faith in them.
There are some things that they may not reveal to you, and isn’t that negotiating in bad faith? For them, it makes the car insurance business profitable, but at whose expense? Definitely yours. So, how about we break down some of these “car insurance secrets?”
Car-tied or Driver-tied Insurance?
Traditionally, a car insurance policy comes tied to the car. This means that no matter the individual driving the vehicle, the insurance kicks in in the event of an accident.
However, some covers have some hidden clauses that exempt the company from paying up if it wasn’t the owner of the car at the wheel.
As such, make sure you read between the lines when taking out a policy, and also don’t be that generous with your vehicle.
Your Driving Record
Have you taken out a policy before and even made a claim? If yes, this information is available to all insurance providers. Insurance agents record everything, even if it was just an inquiry on how to go about making a claim.
Accidents and other traffic violations make insurance more expensive for you, and not even switching providers will help. It is, therefore, best if you maintained as clean a driving record as possible.
Your Credit Score
If you’re in Hawaii, Massachusetts, or California, then this doesn’t affect you much as these are the only states where your credit score isn’t factored in on insurance pricing.
In all other states, insurance companies evaluate your score, and the poorer it is, the more expensive you are to insure. Therefore, the company will charge you more on premiums to cover their bases.
Where You Live
Does where you reside have anything to do with the cost of your car insurance? According to statistics, it does. Last year, people in Michigan paid premiums that were 64% higher than what other citizens paid on average.
Other states with an inflated cost of car insurance included Connecticut, Rhode Island, Florida, and Louisiana. States whose residents paid the least on insurance were Iowa, Idaho, Virginia, Ohio, and Vermont.
Age
This may not be an out and out secret, but you may be surprised that there are those who are ignorant about it. Naturally, the youngest and oldest drivers pay more for insurance.
The young ones because they are somewhat inexperienced, and the older ones because they are more accident-prone, especially since their eyesight may be failing them.
Car Loans
If you are yet to complete payments on your car, your insurance provider may charge you more to cover it. This is because your policy has to carry both collision and comprehensive coverage. If you own the car, then you only carry liability, and thus your premiums will be cheaper.