People across the nation are getting a shock when they open up their annual auto insurance renewal letters; rates are going up. Some are modest increases while others are seeing a jump from eight to ten percent. Premiums are going up even if you haven’t had an accident or moving violation.
So, what’s up (besides rates)?
Experts say lower gas prices and a better economy mean more of us are driving a lot more miles, resulting in more crashes. New technology has also escalated the cost of repairs, even in minor accidents. It used to take a few hundred dollars to fix a bumper or a back hatch after a rear-end collision, now, thanks to cameras and driving sensors, the same repair can cost thousands of dollars. Here are six things you can do that may lower your premiums:
1. Clean up your credit. Many insurance companies look at your credit score and how well you do in paying your bills (except in California, Hawaii and Massachusetts). The better your credit score, the better rate you are likely to receive. Clean credit also helps when you want to buy a new car, rent or buy a home, etc.
2. Increase your deductibles. Sure, the amount you will pay will be a little more if something happens to your vehicle, but the amount you’ll save each month could add up to much more, especially if you are incident free for a number of years. Just make sure you have an emergency fund to cover that higher deductible.
3. Check for good driver/good student discounts. If you’ve been accident free, most insurance companies will give you a good driver discount, but make sure you tell them. The same goes for students with good grades.
4. Check insurance costs when buying a new vehicle. If you are planning on purchasing a new car or truck, research what it could do to your insurance. Depending on numerous criteria including the power of the engine, the model’s safety rating and the loss history of that particular vehicle, your rates could change. A good place to check is the Insurance Institute for Highway Safety and Loss Data Institute’s vehicle safety ratings. It’s also a good idea to contact your insurance company and ask them what buying that dream car will cost you in future insurance premiums.
5. Cut your driving. Carpool or take mass transit. How many miles you drive each year can affect your auto insurance rates; the less you drive, the greater the possible discount.
6. Get a policy review. Has your commute changed? Did you install a security device? Did you get married? Did a traffic ticket come off your record? All of these can lower the rate you pay for insurance. Talking with your insurance advisor at least once a year is the best way to make sure you get the discounts you’re entitled to.