Cars image by Ellanorah from Fotolia.com There are a number of secrets to buying car insurance. The calculation of auto insurance rates is a process shrouded in mystery. Almost no auto insurance companies are entirely transparent on how they develop their rates. Rather, applicants are usually asked to answer a series of questions covering vital statistics, personal history and driving record. The companies then use the responses to generate a quote. Yet, there are a number of secrets to this process that have become public information; knowing them can lead to cheaper rate quotes.
Differing Rates
2.Every auto insurance company uses a different formula for calculating premiums. This means they often assess very different rates for the exact same car and driver. To save money, approach as many insurance companies as possible for rate quotes. Also, if you are simultaneously shopping for a car and insurance, realize that insurance companies have a rating system that assigns a different value to each make and model. Don’t assume the rate quoted for one model will hold true for another, even if they are similar.
Good History
3.It’s a fact that drivers with clean records will pay less for auto insurance than drivers with checkered histories. Most insurance companies will ask you about past accidents and do a background check into your record, accessing any recent incidents. Yet, another kind of record will also affect your payments–your credit score. Generally, drivers with bad credit will pay more for insurance than drivers with higher credit scores, because most insurance companies believe they represent more of a risk.
Absorbing Blame
4.Any accident occurring in a car you own will also likely drive up your rates, regardless whether you were the driver. If someone borrows your car and wrecks, and you file a claim and pay a deductible, the insurance company will likely raise your rates, according to MSN Money.
Discounts Abound
5.Many insurance companies offer a plethora of discounts, though they will not always announce them from the outset. Companies can offer discounts for many reasons, such as having an anti-theft device or anti-lock brakes or if you drive few miles. Certain types of drivers can receive a discount, such as AAA members, students with high grades and certain professionals like engineers, educators and scientists.