There are many factors that play a role in the premiums that will be offered to you by auto insurance companies. Some of them are obvious, but others can be fairly surprising. To keep your rate low you’ll have to get to know what information insurers use when determining your premium. Some things are well within your control, so here’s a list of 5 dumb mistakes costing you bundles on car insurance:
This one should be obvious. Since insurers have to pay for damages when you are in an accident, they will judge you based upon how big of a risk they think you are. Anything on your driving record that indicates you’re likely to cost money is a red flag. Moving violations citations such as those for speeding, tailgating, failing to signal or reckless driving can be disastrous for your bottom line. According to Abels and Annes, stop sign violations account for a huge number of these types of accidents. If you want to save money on your car insurance, you’re going to have to drive safely and keep your record clean.
Much like committing moving violations, driving drunk endangers you and everyone else on the road. According to The Law Dictionary, If you’re caught drinking and driving your insurance rate is all but guaranteed to go up significantly. In some states, you’ll even be required to have your insurance company file an affidavit of insurance to your DMV. Many companies are reluctant to provide this service, and may even refuse to offer you a policy at all.
Most people don’t stop to consider how their choice of car will affect their insurance rates, beyond the sticker price. Bankrate says that insurance rates can also increase for cars with more horsepower, or for those that are designed for “sport”. To keep your rate low, don’t buy a more powerful car than you need.
Insurers also consider your credit history when determining your rate. If you carry high credit card balances or have a history of late payments, your rate can increase. It’s considered a mark of how responsible you are, which helps determine your risk to the insurer.
Believe it or not, failing to get several quotes can cost you a fortune in the long term. Once your insurance company sees that you’re not looking for the best deal at all times, they’ll try to wring as much cash out of you as possible.
Now you know the kinds of things that may cost you a bundle in additional car insurance payments. Being a careful driver is the easiest thing you can do to save money, and being responsible with credit goes a long way as well. Most of all, know that insurers can only charge rates that their market will support, so do your homework before choosing the best offer. Luckily, even if your rates do go up as the result of an accident, you can get quality auto care at a competitive price, so that your wallet isn’t hit twice.