The goal of any insurance provider is to assess the risk that a driver presents, as well as the likelihood that he or she will eventually need to file a claim. While there is no way to predict the future, insurers are taking advantage of modern technology to better determine the driving habits of policy-holders. With telematics, some drivers are paying lower auto insurance premiums than they ever have before.
What are Telematics?
Telematics are digital tracking devices installed on a vehicle to monitor driver speed, acceleration, and sudden braking. Though these devices are optional, there are benefits to allowing insurers to track driving information.
These benefits usually translate to auto premium savings for insured drivers — especially those with a history of insurance claims or traffic violations. Drivers in high risk groups, such as teenagers and the elderly, can also benefit from telematics. Insurers receive actual data for each individual driver instead of relying solely on statistical information and driving records. For those who drive safely, this can mean significant monthly savings.
Telematics are also making it possible to pay for auto insurance on a pay-as-you-go basis. In other words, drivers who operate a vehicle only on the weekends or for leisure may find their premiums decrease as digital tracking devices report less time behind the wheel. This is advantageous for anyone with sporadic driving habits, such as a student home from college during the summer or a retired person who only goes to and from the grocery store.
Drivers carefully shop and compare insurance rates to ensure they are getting the most coverage available at the most affordable price. However, auto insurance premiums are never fixed, and may fluctuate over time. Whether they rise or fall, there are several reasons why car insurance rates are subject to change.
What will Cause Car Insurance Rates to Change?
One of the most common reasons car insurance rates change is due to a traffic accident or citation. Speeding, driving under the influence or being ticketed for a traffic accident are all reasons insurance rates may rise. However, some minor traffic citations may not go on your permanent record or raise your insurance premiums if you take a defensive driver’s education course in the weeks following the citation.
Another reason your car insurance rates may change is if you file a claim. Whether you are responsible for a multi-car collision, or if you become the victim of a car break-in, filing a claim against your policy will likely result in a higher insurance premium. On the other hand, if you do not file a claim for several years, you may see a reduction in your insurance premiums.
Age and Credit
Some factors that influence your auto insurance premiums are unrelated to your driving and claims record. If you purchased your insurance policy while you were young, you may see your premiums drop as you get older. For example, insurers often provide significant rate reductions when women turn 21 and men turn 25.
Similarly, your credit score has an influence on your ability to secure a low insurance premium. Insurers often perceive individuals with good credit as safe drivers. If you received a preferred rate due to a good credit history, but your credit score subsequently dropped, you may see an increase in your auto insurance premiums.
Here’s something you probably don’t ever want to think about. How much will your car insurance increase if you’re involved in an accident? Sure, it’s an unpleasant thought—but it’s something that you have to consider when you compare auto insurance premiums, if for no other reason than to make absolutely certain that you secure the cheapest deal possible. After all, what good are super low vehicle insurance rates if a fender bender will send them suddenly soaring?
The fact is, your car insurance premiums aren’t likely to go super sky high if you’re involved in an accident. But they can increase significantly, and painfully so if you’re already living on a tight budget. To find out what that amount’s going to be, be sure to read the small print on the policy to determine what the insurer’s surcharge schedule is. The average increase is somewhere between 20 and 40 percent if the accident is your fault, but since it’s up to the insurer the amount could end up being much higher or much lower. By performing a thorough comparison of surcharge percentages ahead of time, you could limit your financial exposure in the event of an accident.
But even if you’re able to ensure a low penalty surcharge by reviewing the fine details when you compare auto insurance plans, remember that you’ll very likely lose your good driver discount if you cause an accident. In some cases, those discounts can be pretty deep. Ultimately, the answer to saving money on car insurance is to drive safe and not cause accidents. If you can manage that, you’ll always find yourself in a good position to take advantage of low rates.
We’re not here to preach to you about the health dangers of smoking. And you can rest assured that nobody’s going to pass judgment on whatever vices you have. We do, however, want to pass along a bit of information about how being a smoker just might cost you more than you expected in both home and auto insurance premiums. If you decide you’re still unconvinced, simply compare home insurance prices and car insurance prices, alternating your status as “smoker” with “non-smoker” to see for yourself.
Fact #1: Smokers pay more for home insurance. Statistically, the instance of fires in the homes of smokers is much higher than that of non-smokers, who don’t bring with them the increased danger of smoldering ashtrays and still-lit cigarette butts. It makes sense. And as a result, if you smoke you’re going to be quoted a much higher price for coverage when you compare home insurance prices.
Fact #2: Smokers pay more for auto insurance. While this one seems to make a bit less sense than the increased rates for homeowners coverage, it’s one that’s based purely on stats that show smokers tend to be involved in more car accidents that non-smokers. There are two factors that figure into this. First, smokers are inherently higher risk takers than non-smokers, both in and out of their vehicles. Second, those who smoke cigarettes while driving have an added distraction that can lead to more accidents.
If you’re looking for additional ways to save money on home and auto insurance, quitting smoking just might make a significant impact. Remember to review your insurance policies on a yearly basis, and if you’ve quit smoking in the last year be sure to report that fact to your insurance agent. There might be some discounts awaiting you.
When you compare auto insurance you’re likely to find that the lighter weight your car is, the higher the vehicle insurance rates. Although this seems to fly in the face of reason, the car insurance companies have good logic on their side.
First of all, smaller cars that weigh less can receive a lot more damage if they’re involved in an accident. In addition to this, the fact that they guzzle a lot less gas usually makes smaller cars the most frequently driven, and therefore more frequently exposed to being involved in an accident.
If you drive a big, heavy vehicle like a truck or van, you’ll more than likely be asked to pay lower vehicle insurance rates. But don’t take this to mean that you shouldn’t ramp up the level of coverage when you go to compare auto insurance premiums. Remember that if your truck or van is involved in an accident, the necessary maintenance to fix any damages is going to be higher than it will be in a smaller car, so you need to adjust your coverage accordingly.
Keep this in mind if you compare auto insurance premiums online so that you can ensure you get the most accurate quote possible. For the most part, the more accurate the information you provide the more accurate the quote will be. But you should always bear in mind that online car insurance quotes aren’t binding, and they may change once you get an agent on the phone or visit one in person.
We Should go through the factors that may influence our car insurance premiums, but sometimes we are bounded by the things that we cannot change few things easily. We should always ensure that our idea is to get the best deal and low car insurance premium, so we should not restrict ourselves for anything. Drivers tend to get baffled as to how precisely auto insurance premium are estimated. Drivers will have a basic understanding as to what factors are influencing premiums. Auto insurance premiums are fairly unchangeable across the industry.
Ways to Tone Down – Auto Insurance Premiums
Credit score- keep up a good one
This will be of little benefit to you only if you think to pay your premium at one shot. You can also pay your premiums on a monthly term and this can be thought as monthly loan. The insurance company that you have selected can reject or they can even account you an huge amount for having a bad credit rating.
Devices for car security
You will be eligible for discounts if the engine of your vehicle is equipped with an alarm or an immobilizer. It depends on insurer to another insurer for discounts to be qualified on an devices.
State your Car Mileage
Every company might have their own set of rules on the vehicles mileage and o what extent it would effect your premium, by maintaining the annual limit of your car insurance premium to an average of less than 13/15k you can see that it would start reflecting the cost of your car.
It is always safe to keep the car modifications to a direct minimum. The extra security devices like alarms and immobilisers can normally lower the cost of premiums, this can be a one of the modifications that can reduce the premiums.
Discounts on zero claims
The most dependable way to reduce the car insurance cost is probably to have no claims as bonus. Always try to maintain or build a no claims discount.
Choose large deductibles
The higher your deductible, the lesser the insurance company will need to pay out. Opt out of comprehensive coverage for older cars.
Pay semi annually rather than monthly
Your always benefited by saving a lump of money by paying the premiums for the 6 months in advance instead of monthly payments. Rather than paying the more cash directly to any of the bulk item you can make use of the discounts that are provided by your auto insurance company.
You can keep your car insurance premiums low by maintaining a good driving record and driving safely to avoid accidents or insurance claims. Consider the following recommendations, which are eaily obtainable and can easily save you money on your auto insurance premiums over a long term.
- Drive safe. Leave early enough to reach your destination and drive the speed limit.
- Take a defensive driver’s course for a discount on your Texas insurance policy or reduction in driver’s license points, which also lowers vehicle insurance costs.
- Shop around once per policy term. When you near the end of your term with your provider, obtain quotes form other companies. If you receive a lower quote, ask your provider to match it.
- Insure multiple policies with your auto insurance provider to get a multi-policy discount. If you have your life, boat, motorcycle or home insurance with another provider, ask if switching the policies to your current provider will reduce costs.
- Attach a young driver to the safest car. If you have a young driver on your car insurance policy, attach him to the safest car you own to reduce costs. Ask your insurance provider for details.
- Purchase safer cars. Vehicle features, such as multiple airbags, an alarm system, traction control or electronic stability control help to reduce costs.
- If you move, consider staying close to your place of employment. Risk is determined on the mileage you drive.
- Purchase from a provider who offers a 12 month policy. This way, your low rate is guaranteed for at least one year. A six month option can raise costs upon renewal, especially after a ticket or accident.
With auto insurance rates seemingly always on the rise it can be beneficial to consider purchasing vehicles with lower monthly premiums. In Texas having car insurance is not only necessary to protect your vehicle it is also required by law. Choosing a car that has a high safety rating, low repair costs, and is less likely to be stolen can significantly reduce auto insurance rates. Here are a few vehicles that will keep insurance costs at a minimum while providing a great driving experience.
1. Jeep Wrangler – This all purpose vehicle has a high safety rating and low repair costs
2. Ford Escape – A smaller SUV, has a relatively low price and strong safety rating
3. Mercury Grand Marquis – A five-star safety rating leads to higher safety rating
4. Ford Ranger – This pick-up is one of the cheapest on the market and has a low theft rate
5. Chevrolet Equinox – The SUV/Mini-van hybrid has accident avoidance features and high crash rating scores
These vehicles all carry relatively inexpensive auto insurance premiums. Texas drivers looking to reduce their car insurance payments would be wise to look into vehicles that provide function over flash. Instead of going for a brand new, high-end convertible try finding a pre-owned SUV that comes with a strong safety rating. By picking a safe and inexpensive vehicle drivers can cut down on auto insurance costs and spend their hard-earned money on more entertaining options.
Multi car insurance policies can be one of the most effective ways of lowering your auto insurance premiums. Insurers offer multi car discounts as incentive, since the added business brings the insurance company more revenue. But while signing up for multiple car insurance saves the average person about 25 percent, it’s not always the most economical option. Here are a few facts about multi car insurance policies that you might not know.
- People who share the same household can take advantage of multi car discounts even if they’re not family. In other words, you don’t have to be married to someone or directly related in order to take advantage of the discounts.
- Bad driving habits can cancel out good driving habits. If you have a stellar driving record, sharing a policy with someone who has a less-than desirable record might actually increase the amount you pay. Likewise if you have a history of accidents or tickets, going into multi car policy with someone without a blemish on theirs won’t save you money. In this case, it makes more sense to have separate policies.
- Some insurance providers require that all cars under a shared policy have the same level of coverage. But the older a vehicle is, the less sense it makes to carry full coverage—whereas someone with a brand new car may want comprehensive insurance.
- You can continue to carry your children on your family insurance policy until they’re 25, as long as they still live with you.
- If you own more than one car and live alone, you can still take advantage of multi car discounts.
It’s every parent’s worst nightmare: insuring a teenage driver. Most people fret over the potential financial impacts long before their children have even exited the diaper stage, and rightfully so. The cost of teenage auto insurance can be outlandish. Nobody’s blaming the insurance companies—statistics drive the rates. But you’re not entirely helpless, either. There are some things you can do to lower the astronomical rates you’ll be asked to pay, if not dramatically then at least incrementally.
Everyone knows that a passing grade in their DMV driver’s test is a prerequisite of obtaining their license in the first place. If it weren’t, there would be a lot less frayed nerves at the dreaded “moment of truth,” and a lot more bad drivers on the road. But did you also know that maintaining high grades in the classroom can impact your teenage auto insurance premiums?
Auto insurers offer discounts to “good students” that range from 10 to 25 percent. This may not sound like much, but when you consider being able to save almost ¼ of the high cost of insuring a teenage driver, you begin to see dollar signs in your field of vision.
Most insurance companies consider a B average to be the dividing line between “good” performance and “substandard”—and although achieving high grades doesn’t automatically make someone a good driver, insurance companies consider kids who are able to balance their school life with their social life to be far lower risks.
Tip: Talk to your insurance company about good student discounts. Then have a serious talk to your teenager about what you’ll be expecting of them if they want to keep their driver’s license.