Car Insurance: 10 Ways to Keep Your Rates Low – Part 1
Car-owners in DC, MD, and VA are legally required to have car insurance, so it’s safe to assume that you are paying for auto insurance. Insurance is an important product that provides legal protection for both you and one of your biggest assets—your vehicle. It’s not uncommon for even small accidents to climb into the $5,000-$10,000 range, and the truth is most people would have a hard time coming up with such large amounts of money without insurance coverage.
Now, imagine if it’s a bad accident where costs could easily balloon into the $100,000 plus range and just how financially damaging that could be. Often times, we lose sight of this when we see the insurance payment deducted from our accounts each month, and though price is a factor, How much you pay shouldn’t be the only thing that guides your decision. We buy products all the time that aren’t the cheapest option because they have the best value. The coverage you have on your policy, the company you insure with, and the insurance agent servicing your policy should all be factored into making the best purchasing decision for your auto insurance. With that in mind, here are ten things you can do to help keep your car insurance costs low.
1. Maintain A Good Driving Record
Insurance companies don’t know what the cost will be to insure you. They can’t predict when you will have an accident, and ultimately they can’t predict what that accident will cost. All they can do is look at different factors or rating variables about each potential client, compare it to existing clients, and attempt to predict what the likelihood would be of that person having an accident.
One of the best predictive factors is your driving history. All insurance companies will look at your motor vehicle report for the last 3-5 years to help determine what kind of driver you are. Are you a driver with three speeding tickets in the last year or are you a driver with a clean record? If you are the driver with a bunch of tickets, even just HOV violations, insurance companies will look at the charts, and typically charge higher premium because your chances of being involved an accident are higher. So, the best thing you can do to keep your auto insurance premiums low is maintain a good driving record.
2. Don’t File Small Claims
A small claim is always a tricky situation, which is why it is great to have a knowledgeable independent insurance agent. You walk out of work after a long day and there is a scratch down the side of your car. The first thing you think to do is file an auto insurance claim. After all you pay for insurance every month and haven’t used it ever. Although, this logic isn’t wrong, and this is something you could file a claim for, it isn’t always in your best interest.
Like your driving record, your claims history is factored into your insurance premium. Most companies offer a claims free discount. If you haven’t filed a claim in years, rest assured you are paying lower premiums than someone who has. When you file a claim, you are no longer claims free, and a lot of times people end up shocked when their policy renews and the monthly premium is different. I hear things like “I was with this company for 10 years and never filed a claim, and now my policy went up!” The unfortunate truth is now you are being rated as someone with a claim, which often results in a higher premium.
In most cases, filing the claim is unavoidable, and that is what your insurance is for. Insurance is supposed to make you whole again when you have an accident, so don’t take this as me telling you not to file claims. But in some cases, it may not be worth it for you. If the total claim payout is only going to be a couple hundred dollars, it is not worth it to potentially have your premium increased for the next 3-5 years. Bridge First Insurance agents always consult our clients in these scenarios to help them make the best decision for them financially. Sometimes that means filing the claim, and sometimes it means avoiding it.
3. Maintain Good Credit
Most states will factor credit into your insurance premiums. It is a fairly reliable indicator that the client makes payments on time and is generally responsible which often translates into responsible drivers. Credit history is not the only factor. In fact, it is just one of hundreds of factors, so if your credit is not as good as you wish, don’t be discouraged. You can still find good car insurance rates.
4. Don’t Let Your Coverage Lapse
A huge factor insurance providers try to determine is responsibility. Anytime you are driving without insurance, they typically view this as a red flag. Even just one day without insurance could lead to a potentially huge accident and thousands and thousands of dollars in liability.
Most insurance companies have surcharges or additional charges of 10, 15, or even 20 percent when someone goes uninsured for a period of time. It is very important to make sure your coverage is always up to date and in force. At Bridge First Insurance, we highly recommend staying on an automatic payment plan to help prevent possible cancelation due to a payment that clients forget to make.
5. Find The Right Match With Your Auto Insurance Company
As you can see from above, insurance companies consider hundreds of factors when determining your premium, and all insurance companies do this differently. They consider things like your age, sex, location, vehicle you’re driving, how much you drive, marital status, driving record, claims history, credit, where you work, coverage requested, whether you own or rent, how you choose to pay, and many more factors.
They compare this to their current clients and their claims history to determine a price for you. All insurance companies weigh factors in different ways. Ever wonder why your friend has a great quote with one company, but when you get a quote with them it’s completely different? That is because each client has a unique insurance situation. No one company is always priced the best. That is why it is so valuable to have an independent insurance agent like the agents at Bridge First Insurance.
Find an insurance provider that will look at your situation most favorably. One company may focus on good driving history, another on credit score, and another on coverage options selected. A good insurance agent knows what market is going to find your situation most attractive and result in the best possible car insurance rates for you. You can try to run a couple of quotes for yourself online, guess at the coverage you should have, and find yourself frustrated when you can’t find an affordable policy or you can consult a Bridge First insurance agent who already knows what is going to be the best match based on what you are looking for. Give us a call, and begin saving today!
Jack has achieved success in the insurance industry through a consultative and honest approach to clients. He designed this approach around educating clients on important coverage and allowing them to decide what policy would best fit their insurance needs. In 2013, Jack and co-founder Dave Zappacosta, established Bridge First Insurance, as an independent insurance agency operating in Virginia, DC, and Maryland.