There are some things you feel you might never know enough about. Automobile insurance is one of them. While there’s plenty information on the Internet about automobile insurance, you’ll be surprised to find that ONE thing you didn’t know about. Here are a few such things we could think of about automobile insurance.
Your credit score affects your premium rates
Not everyone knows this but your credit score plays an important role in determining your premium rates. Basically, if you have a poor credit score, chances are your premium rates will be high. Similarly, if you have a good credit score, you premium rates will be low. Insurance providers are inclined to believe that people with poor credit history are less inclined to pay their insurance bills on time.
Being loyal to your carrier is fine, but keep an eye out for better rates
Being loyal is one thing, but most people tend to buy insurance and forget all about it. What they forget it that insurance companies have increasingly gotten more and more competitive about their rates. Insurance companies offer competitive rates, exciting discounts, great services, package deals etc to attract customers and there’s no reason why you shouldn’t make the most of that. It’s best to keep an eye out for better rates; shop around every once in a while and enquire about the rates with different companies.
Not informing your insurance company about life changes
As mentioned earlier, several factors affect your insurance rates. Amongst these, a life change is one of them. Let’s say for instance, your get divorced or you retire or your teenaged son gets his driver’s license. These factors can affect your insurance rates. It’s best if you make it a point to inform your carrier if and when a significant change takes place in your life. Re-evaluate your policy on a regular basis to make sure you still have a package that works best for you.
If switching companies, cancel your former policy
We’ve seen that people think switching companies is just a matter of stopping payments on your former policy. This is a big mistake! If you don’t cancel your former policy, the insurance company could report you to the credit bureau for not paying your dues. This could damage your credit score. Furthermore, this might get added to your record and could very well be used as a reason for a new provider to turn down your insurance application.
Paying your automobile insurance premium in full is cheaper than monthly installments
This might come as a surprise to many, but when you break up your payments into installments, car insurance companies tend to charge an administrative fee. The more you divide these payments in installments, the more these ‘administrative fees’ add up. And when you do the math, you’ll realize that what you once thought to be a cheap policy can cost you a whole lot more. Ask your carrier about these administrative fees and if it’s feasible for you to pay your premium in full, up front, then you should.
Car insurance doesn’t have to be a tricky subject. Keep your eyes and ears open and you can do no wrong!
Bethany Collins is a mother of two who works from home and lives with her husband. She is voracious reader and always looks out for happening topics related to personal finance. She specializes on subjects related to car insurance and uses her spare time to write on topics related to car coverage etc.