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With the cost of living increasing regularly, one of the first things people look at to try and save money on is auto insurance. Auto insurance premiums appear to be going up regularly for everyone, thus more people are shopping around regularly for lower prices. However, before you start calling around and getting a quote, there are a few things to take into consideration that will help you figure out if switching carriers is worth it and ways you can save on your current policy.
First of all, consider this: would it be worth saving $5 a month just to change to another company if you have to place any claims? Remember that not every insurer has the same rating calculators, rules, and regulations, and they also don’t have equal communication and customer service. Sure, you may save $60 a year, but if you have a poor claims experience or other experience and waste time and money sorting it out, then that $5 turns into a lot more potentially.
If you’re with a company you like but just want a lower rate, consider these to help you save before you switch to another company:
Ask to see if you’re paying extra fees. With most companies, if you pay monthly, they charge you an ‘installment fee’ that will cost you a considerable amount over time. You can save some money often just by either paying your premium in full, or at least as much as you can of it, so that the installment fees are removed either completely or partially. Additionally, with most insurers, if you set up an automatic draft monthly from a checking or savings account, then you can save that monthly installment fee as well by using an EFT method. It’s also helpful because you’ll never again forget about your bill and know it will be automatically deducted without having to even remember it.
Many insurance companies are now using credit ratings as a huge factor when calculating premium. To calculate premiums, part of what insurance companies do is rate you using an insurance score, and one of the things that makes up your insurance score is your credit rating. So many companies have become so strict with this that they will sometimes even refuse some people’s applications for insurance, and insured individuals will also see an increase in their premium at renewals, and possible a cancellation for poor credit. Unfortunately statistics say that people with bad credit make more claims, so improving credit can help you get your rate down, it just may take some time.
Just because you experience damage doesn’t mean that your insurance company has to know about it and pay out on it. If you experience something like a comprehensive claim where a window was broken or something small was stolen, then bypass the claim process and take care of the expenses yourself. Most claims, no matter the size, will cost you a lot on your premium for at least three to five years, so if you have a $500 deductible and spend $700 to get it fixed, remember that your insurer will only be paying $200 towards it anyways. So by the time you’ve paid your deductible amount of $500, your insurer has only paid $200, you’ll end up paying out more in premium than you will on just fixing the car yourself without involving the insurance company, and claims history account for a lot when insurers go to rate your premium.
There are several things you can do to find a better rate by staying exactly with the same company you’re with: it doesn’t always involve having to switch companies, and odds are, you’ll save a lot more time in productivity as well.