Auto owners insurance has been around for as long as people can remember. Now that everybody knows how to choose a good company having an excellent reputation and strong customer service. It now seems that car owners can always purchase coverage from the right insurers. It is indeed important to choose the best company you can get; you can do this by conducting little online research to find information about any particular company’ claim ratio, customers satisfaction rating, financial strength, available discounts, and more.
Nonetheless, there are other things that you probably don’t know about auto owners insurance as briefly outlined here.
Tips to Save On Auto Owners Insurance
1. Women(usually) Pay Less
In most cases, men drive more aggressively than women do. One of the most important variables that determine your overall insurance premium is whether you are considered the safe or high-risk driver. The general assumption is that there are more male high-risk drivers than the female ones. As expected, any insurance company is extremely careful when checking your personal data including driving history. A High-risk driver is more likely to file claims or be involved in accidents either minor or major. Based on the assumption that high-risk category is mostly filled with men, insurer usually charges less premium fee to women.
2. Education Level
Education level and professions are important variables to calculate insurance estimates. Some people consider this discriminatory practice and some states indeed ban the use of occupation and education level information as variables in determining insurance premium. However, it does not change the fact that it is the standard practice for years. Some insurers do not use such method, but others simply argue that occupation and schooling do play their roles, based on real statistics. It suggests that someone who has a college degree gets the better bonus than a high school graduate receives. A bachelor also needs to pay more than someone with a master’s degree, and so forth.
Occupation also matters. Some professions involve high-stress levels, lack of sleep, frequent overtime which easily relates to high risk of accidents for insurance companies. Some of the high-risk professions include lawyers, doctors, architects, salespeople, business owners, real estate brokers, etc. On the other hand, low-risk occupations may include scientist, artist, accountants, nurses, pilots, and teachers.
Regardless of your education level and occupation, please ask the company if certain discounts are available for certain professions and academic degree, too. If you don’t have a college degree, only go to the insurer that does not use this particular method. If you have any academic degree, however, it is good to take advantage and get the provided discounts.
4. Credit score is still a major factor
The use of credit score as the variable to determine the price of a premium fee that every customer has to pay every month is quite controversial. Some states prohibit insurers from using customers’ credit information. This practice, however, is still very common. Your current credit score is used for predicting the level of your financial responsibility in the future. If a driver has a bad credit score it sends a red flag indicating that you probably will not be able to pay the insurance premium. This will result in more expensive premium; people with more money can often pay less. Such practice is illegal in some states including California, Massachusetts, and Hawaii.
5. Your Money Does Not Stay Still
Similar to almost all financial institutions, the auto insurance company wants to capitalize upon the already existing capital. In simpler words, the company takes your money and invest it but not on your behalf. The most difficult part of this process is, of course, attracting new customers. It has tough competition in the market, and your business probably has better deals with other companies in the area. To win the competition, every car insurer has to offer competitive prices yet not too cheap to anticipate payout that you may request in the future after filing claims. Once again, it takes some calculations to figure out the right premium for your particular risks. In most cases, the auto insurance company only hopes to manage to reach break-even point from the money that you pay every month.
6. Different Place, Different Price
Another major factor that helps determine premium fee is location or your address. Each state has its rules about minimum liability coverage, traffic violations fines, etc. Moving to a different state, although not very far from your current address, can affect the premium too since the new location probably has different laws that affect coverage and it has different insurance companies in the existing market as well. Certain locations such as big cities may require you to pay more expensive premium especially if the city has the high record of accidents, vehicle theft, etc.
7. Young and Old Pay The Most
The youngest driver purchases coverage for the most high price. The premium will decline steadily until the driver turns 25. From this point, the premium will probably stay flat for quite a while, usually until the driver reaches 55. Premiums also increase as the driver is old enough to be considered a senior driver.
At long last, bear in mind that regardless of how great the auto owner insurance company looks and regardless of the possibility that the premium or month to month protection rate fits in your budget. Auto owners insurance is a necessity these days, hopefully these 7 tips helped you navigate the confusing world of auto owners insurance.