Five Important Facts About Car Insurance That No One Ever Tells You
Five Important Facts About Car Insurance That No One Ever Tells You
Posted on May 26, 2020
You probably know that insurance companies base their premiums on your driving record, age, and how much you drive. But, today's insurance providers also use a range of other factors to calculate your rates. Here are five of the lesser-known (but just as important) facts that play a role in how insurance companies determine your rates.
Save Money By Paying Your Premium in Full Every Year
Car insurance companies charge administrative fees when you opt for an installment plan. The more you break up the payments, the more you pay in convenience fees. Keep an eye out for discounts awarded to those who subscribe to automatic payments. Many providers will offer lower fees if you agree to direct payments right from your bank account. Plus, with automatic deduction, you won't need to worry about being late or missing a payment.
Your Credit Score Impacts Your Rates
Insurance companies claim that people with poor credit scores are more likely to submit a claim than those with good scores. While the reasoning behind this logic may be debatable, the bottom line is not. Maintaining good credit ( a good idea anyway) will lower your auto insurance premiums.
Loyalty May Cost You Money In the Long Run
Your current provider may have had the best rates in town when you started driving many years ago. But, things quickly change when it comes to auto insurance. Resist the urge to automatically renew every year. Shop around and you might be pleasantly surprised at how much you can save. Get quotes online and see if your current broker can match them. Also, If you're concerned that lower rates mean poor service or inadequate coverage, don't be. Many insurers offer excellent products and exceptional customer service at reasonable prices.
Pay the Final Bill if You Switch Companies
If you do switch vendors, be sure to pay your old provider in full. Don't just stop paying to force cancellation. Your former insurer may report your account as delinquent, which could damage your credit score. Also, your insurance history will reflect a failure to pay, which, in turn, may cause the new provider to decline your application. Instead, be sure to complete any required paperwork, such as a policy cancellation form, and time the switch to take place on the same day.
Your Insurance Company Can Cancel or Non-Renew a Policy at Any Time
If you violate one or more of the policy's guidelines, your insurance company can cancel it at any time. The same applies to renewals. Failing to pay your premiums on time, excessive at-fault claims or even too many moving violations may cause your insurance company to drop you as a customer. Those who lose their driving privileges due to suspension or revocation of their license may also find themselves seeking a new carrier. Also, keep in mind that your insurance company is required by law to state the reason for cancellation but not so with non-renewal.
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