Lower Those Auto Insurance Premiums

It can be very difficult to find the best premiums for car insurance. After all, car insurance companies do not make their methods of calculating premiums public knowledge. However, while you may not be able to figure out exactly what factors insurance companies are weighing, it is known that your credit score plays a significant factor. This is because studies have shown a connection between your likelihood of filing a claim and your credit score. Insurers figure also that someone who has had the same credit accounts for a long time, and who pays bills on time, is likely a stable person, and less of a risk for driving poorly.

Note: Although your auto insurance risk score is not available for you to examine, it will be somewhat like your credit score. If you’ve had unfavorable activity on your credit score recently, it is best to wait a month or so for things to return to normal before purchasing auto insurance. Another factor in determining your premiums is your car itself. Most auto insurers have a system developed by Car Insurance Services Office that factors age, make and model that begins with the cost of your car and then adds in safety factors and theft statistics. Just like your “insurance risk score” this rating information is not available to the consumer.

Another thing you can do, and frankly you should be doing it anyway, is to avoid accidents on the road. Besides the expenses involved in the accidents themselves, car insurance companies will unflinchingly raise your insurance premiums up if you’re proven to be at fault for a recent driving accident. If this has already happened to you, then don’t despair. You can still work your way back down to lower premiums, it will just take a long time of driving safely. Avoiding accidents and other traffic altercations will save you money and trouble in every possible way.

In the event of an accident contact your insurance company about its forgiveness policy, if any, and see whether or not you qualify. Some companies have a policy of forgiving each client’s first accident. Some companies will forgive the accidents of certain qualified clients. You should also be aware that if a friend, using your car, gets into an accident then you will have to file a claim with your insurer. If your friend is uninsured and causes damage that exceeds your coverage then you may be held liable for damages.

Another factor in your premiums is your car’s real value. When determining replacement value, many insurance companies check with local dealers to find what they sell similar cars for. If you think your car is worth more than what the insurance company is offering to pay, you can dispute this. If you’ve made upgrades to your vehicle with special parts, etc., be sure your company knows this so the extra value is covered. If you’ve had regular routine maintenance or extra low annual mileage, produce these records to show the company your car is worth more. You can also plan ahead with “gap” insurance, which would cover the difference between what you owe and what insurance would pay you.

If you get into an accident with an uninsured motorist, and he or she is at fault, then if you hold multiple car insurance policies you might try to “stack” them. “Stacking” refers to collecting from multiple policies for the same incident. Check the language of each of your insurance policies to see if they allow stacking. If you have UM/UIM coverage on more than one car insurance policy, then you can likely make claims under each until you have recovered 100% of your damages.

Note: You can wait to add your teen driver until they are licensed. While operating under a “learner’s permit” your teen does not need to be on your coverage, thus saving you money. However, do NOT forget to add them as soon as they become licensed. If you delay, you’ll have to pay the higher premium retroactively to the date they got their license. Note: When changing insurance carriers, be sure to cancel your previous coverage in writing. The easiest way is to give your insurance agent a call. They’ll even complete the cancellation paperwork and send it to you for signature. Be sure to give the exact date your new coverage begins, so that you do not have a lapse in coverage.

Susan Reynolds is the content coordinator for a leading South African Insurance Provider who specialises in Car Insurance Policies.