How to Secure Low Auto Insurance Premium Rates
Many drivers are shocked when their automobile insurance policy comes up for renewal and their premium rates have increased and not decreased. Auto insurance companies will tell you that two things come into play when they calculate your premium rates. For most auto insurers these are your credit score and your overall driving record.
Let’s first examine why your credit score plays such a big role in how your premium rates are calculated. Most people have their credit score to see if they can qualify for a line of credit. For example, if you want to purchase a cell phone contract, get a loan, or buy a car then the person extending the loan wants to make sure that you are in fact credit worthy.
Now, when an auto insurance company examines your credit score, they want to know how responsible of a person you are. If you do not pay your bills on time each month and your credit score is low then the insurer views you as a risk. If you do not pay your bills on time then why would they think that you would in fact pay your auto insurance premiums on time each month? The answer is that they will be very skeptical so you will pay more for your auto insurance coverage. Now, if you can show for six or more months that you have paid your bills on time and there are no new delinquencies then you may be able to secure yourself some great discounts on your coverage in the future.
Now, we can move onto the driving record. If you really want to get a discount then you need to divulge as much information as possible about yourself. Auto insurance companies will give really great discounts to drivers that do not drive a lot of miles each year. You will have to prove this by installing a mileage recording device on your vehicle for a specific number of months but it is well worth the investment of your time. It is important for drivers to see auto insurance rates from the point of view of their insurer. They want to reduce the amount of liability that they carry. If they have a driver with a bad credit score and are driving a lot of miles each day then that driver is more likely to be involved in an accident.
Automobile accidents can cost thousands of dollars in damages and medical bills so insurers want to cover their possible losses. If drivers can show that they want to minimize their amount of risk then they can gain favor with their auto insurance company. One great way to do this is to select a deductible for yourself.
You can get one that is as low as $250. The way that an insurance deductible works is that if you are involved in an automobile accident then you will pay a specified amount of money towards the repairs or damages. This helps to alleviate the financial burden on the auto insurance company and can get drivers a discount. Make sure that you do not take on too large of a deductible so that you can get a huge discount. Many drivers have had an issue paying their deductible if they have one that is too high.