Ever wonder why some individuals seem to get the best car insurance rates while the rest of the individuals struggle with outrageous premiums? Chances are it is not because of their driving record… well a bad driving record might have something to do with it… But here are the top reasons why people with GOOD driving records are paying too much for car insurance.
1) You chose the wrong vehicle… I mean you chose the wrong vehicle when it comes to insurance. Some get cost more because of their lack of safety, likelihood of theft, and cost of the actual car. Look at it this way, Kobe Bryant’s $329,000 Ferrari 458 Italia is going to have an extremely high claim if damaged or totaled! So you can almost be certain he is paying a tad bit more than the average consumer.
2) You didn’t pay your bill and you let your policy lapse. This is not the worse thing you can do… It is MUCH worse to continually not pay your bill and let your policy lapse year after year. In this case think of the insurance companies as creditors. The more they see you as a liability the more they will make you pay. (I mean “they” as all insurance companies) Just try it… Continually miss payments and let your policy lapse for a couple years in a row and watch your car insurance rates increase wherever you go.
3) Not that I have you thinking of your insurance company as a creditor, realize that having bad credit could also affect your insurance premiums. That’s right, bad credit may mean that you are a liability, you are not responsible, or you do not pay your bills on time. Any of the above may worry a company about insuring you and worry = higher premiums.
4) You have yet to hop on a company bandwagon and bundle your policies with one company. If this is you don’t be distraught. It’s understandable to not want to bundle when you see company A has the best homeowners insurance, company B has the best auto insurance, you have a family friend who handles all your retirement planning so he has your life and annuities, and the local agent is the most trusted commercial insurer around so all business insurance goes through him. When it comes to investing they tell you NOT to have all your eggs in one basket… but in a case like this you can save about 10-25% on an existing policy for adding additional policies with that carrier. If you do not have your home and auto bundled, then get a quick quote to see how much you could save on your home and auto rates… then come right back.
5) Speaking of quotes… Not getting quotes is the next reason people pay too much. It is great if you have an agent you love and trust! But it is a good thing to occasionally get quotes to ensure that you are not paying way too much. If you notice your rates climbing every year, have an independent insurance agent get you multiple quotes. You may find that you can save by switching to another company. All companies have difference rates and discounts, so as your insurance needs change, so may your eligibility for different discounts.
6) You make small claims. Yes your insurance company is there for you to make claims… but they are not there to pay for every small amount of damage that happens to your vehicle. Insurance is meant to save you from huge financial losses. Those with a tendency to file a claim every time something happens, also tend to watch their insurance rates increase over time.
7) Along with making claims for everything, some individuals keep their deductible as low as possible. It makes sense right? The lower the deductible, the less you have to dish out when filing your claims. This is especially really important when you are making small claims all the time. But unfortunately, a lower deductible means a higher premium. Even if you never make claims, you are paying much more on a monthly basis by keeping your deductible low. If you do not make a claim for several months, a $500 increase in your deductible can save you thousands over the months to come.
8) You have teenage drivers. This one is not entirely your fault. But unless you want your children to wait until they are old enough to pay their own insurance policy, you may be stuck with higher car insurance rates. Why, you ask? Simply because teens are less experienced drivers, meaning they are a higher risk driver. (not to mention all the distractions they now have) If you think your rates increase enough just by adding a teen to your insurance, then you’re going to be in shock if they get in an accident while driving your car.
9) Do you have a need for speed? Okay, so I mentioned that these reasons excluded bad driving records. I’m still 90% honest. Many people with good driving records sometimes have a led foot, or just run late to work on a weekly basis. (me included) So you have no accidents on your record, no DUIs, and have made next to zero insurance claims…. Well getting speeding tickets can ruin all that. One ticket probably will not affect your rates. But when you have multiple speeding tickets, insurance companies will begin seeing you as a risk and you will end up paying.
So, are you one of the people who can afford to pay more on your insurance premium than everyone else, or are you willing to save a little money? If you can, start saving right away. Make sure you are getting all your discounts, bundle your policies, increase your deductible, start building your credit back up (maybe start by paying your car insurance bill) and for goodness sake stop making small claims! Have more questions about how to lower your premiums, call us at 480-830-1800!