Why Have A High Deductible On Your Car Insurance

Published by author on May 26th, 2009 - in Insurance Deductibles

Reader’s Question:

When you say $500 deductible, what does it mean? Can you please explain to me what a deductible is?

Dan

Las Vegas, NV

A deductible or an excess is an amount paid by the policy holder before the reimbursement of a policy becomes applicable The lowest deductible usually range from $250 to $500. However, you can also opt to pay greater deductibles. The question now is whether to choose a high or low deductible.

Before you get anything out of your pocket, it is best to conduct a few research first. You may continue surfing online after reading this or ask someone you know who is knowledgeable in the car insurance business. Any insurance agent that you will ask will surely advise you to pay a greater deductible.

Most policy holders opt for the $500 deductible. That has practically become a standard but there are people who choose higher deductibles. Some pay a thousand dollars or two; some even raise their premium up to $5000.

The benefit in choosing a higher deductible is that it takes a few dollars off your periodic premium. This only means that the higher the deductible is, the lower the premium becomes. But don’t choose an extra-high car insurance premium yet. You must keep in mind that a deductible is the amount of money you paid in advance should you get involved in an accident. For example: Henry paid a $250 premium. Then he met an accident that cost him $400. The first $250 cost is already paid by him in the form of the deductible. The remainder will be taken care of by the company. This shows that paying higher deductibles means paying more from your personal funds in case of an accident.

The lowest deductible that you have to pay depends on your company, your car (its type, model, and condition), and your lien holder. Try asking as many people as you can before paying for anything. The answer to that question above relies on factors like car type and likelihood of meeting an accident. Be very prudent because the last decision is always yours.

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What Factors Affect Car Your Insurance Rate

Published by author on May 26th, 2009 - in Auto Insurance Saving Tips

Reader’s Question:

What makes an insurance premium higher and lower? I have no idea what affects car insurance premium.

Jane

Portland, OR

Purchasing car insurance can be very tricky. It can become very expensive if you have no idea on how to lower your car insurance cost. If you also don’t find ways to negotiate your costs, you will also forgo the chances of getting savings.

It’s not like maintaining an insurance can drive you to the poor house. However, why pass on the chances of having lower rates when you are entitled to one, right? Why not know about the factors that can affect your insurance cost that way you can have full protection at your satisfaction?

To give you an idea, here are some factors that have direct effect on your insurance premiums. Understanding them will drive you to the path of knowing what to do should you consider having one.

Credit History

Insurance companies will always regard this. This is where they can evaluate how well you do in maintaining your debts. The better it is the lower your cost are.

Driving History

Insurance have underwriting process. They will also look into your records to see if you are a high liability to the company. People, who have no history of violating road rules and driving regulations, are great candidates for cheaper cost.

Biographic Data

Age, gender and your civil status has a direct effect to your cost. This is statistics-based which means, your cost will increase depending on the concluded risk in every category. Even the area where you constantly drive can also affect your cost. If your location has higher number of accidents, you will most likely be affected with this.

Occupation

Your work can tell how good you are as a driver. That’s based on statistics. Anyone who’s always on the road while doing their job can be in higher risk for accidents, thus increasing auto insurance premiums.

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I Need Cheap First Time Driver Car Insurance

Published by author on May 26th, 2009 - in First Time Driver Insurance

Reader’s Question:

Will you be charged a an expensive car insurance premium if you have never had insurance before? What can I do to get cheaper car insurance for first time insurance buyers?

John

Honolulu, HI

You have probably been told that insurance policies are very expensive nowadays. But you don’t have to turn back and forget about getting insurance. Aside from being required by law, it might come in handy.

Compare Quotes, Policies, and Reputation

While policies are indeed very expensive, you still have many choices to save since competition in the insurance industry is very healthy. Insurance companies want to beat each other in terms of rates, coverage, and services offered. Try to compare their rates in relation to the quality of services they offer. You may also want to find out about the way they deal with their customers; some companies might be too aggressive while some don’t make their policies clear. Ask some friends or check out online forums to get the most excellent services that you definitely deserve.

Driving Courses and Academic Records

Since it is your first time to purchase insurance, it is presumable that you are young. Younger drivers are charged more but you can acquire discounts if you have enrolled in defensive driving courses. This can save you up to 10%.

You can also get more discounts of you have outstanding academic records. An average of B or a 3.0 GPA will trim 10-25% off your insurance rates. Companies vary on the discounts they offer regarding academic performance so find the best quotes available.

Choose the Right Car

Sports car may make you look great, but they can make you poorer. Not only do they have sky-high sticker prices, they are also very expensive to insure. It is best to select cars which are cheaper to maintain. You may also install additional safety features such as laminated windshields and tire pressure monitors. The safety features and crashworthiness of your car are part of the evaluation.

Register as a Group

If there are still uninsured people in the neighborhood, ask them to tag along. Car insurance companies give group discounts. Or you can just ask your parents to include you in their policy instead of having your own.

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What Causes Your Car Insurance Premium To Increase

Published by author on May 26th, 2009 - in Auto Insurance Saving Tips

Reader’s Question:

I was wondering how car insurance is calculated by insurers and if you think it would be possible to know your rate based on the information to determine how much or how little a rate may be for a certain individual?

Marion

Philadelphia, PA

Car insurance companies base their calculation on statistics regarding your likelihood to get involved in an accident. These data are acquired by your carrier from government and private sources. Companies will usually classify your risk as:

Preferred: you are least likely to meet a road accident or other incidents that result to damages on your vehicle.
Standard: while you aren’t the safest motorist in town, you are not that awful either.

Non-standard: this tells you to be more cautious with your car because you are very likely to file a claim, something that nobody really wants.

So now you are wondering how come your company thinks you are prone to vehicular accidents. Take a look at the factors below that affect your car insurance rating:

Age

All insurance carriers charge teens higher than more experienced drivers. Statistically, drivers above 25 years old have less accident records than drivers under that age. Drivers aged 50 to 65 are rated the cheapest in relation to age. It is unfortunate that car crashes are the top cause of death for teenagers, especially 16 year-olds.They are three times more likely to engage in a fatal accidents.

Gender

Car insurance carriers are not gender biased-it’s pure statistics. Female drivers meet lesser accidents than male, plainly because males drive 60%-65% more.

Marital Status

Married drivers are granted lower rates because they have lesser claim statistics.

Geography

Car insurers do look into police records, or at least not literally. They charge higher to customers who reside in areas that are prone to theft, fire, and other non-collision related damages.

Vehicle Usage

Cars used for business, e.g. product delivery, are given more expensive rates. The opposite is true for cars used solely for leisure. This is because they are least used and the probability for accident is lesser. Therefore, your work will affect your rating.

Other variables for your car insurance premium are:

  • Vehicle type, make, and model: more expensive means higher rates
  • Education: its pays to take advance driving courses
  • Distance from home to work
  • Years of driving experience
  • Credit record: pays to have a clean one
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Need Cheap Young Drivers Car Insurance For 16 Year Old

Published by author on May 26th, 2009 - in First Time Driver Insurance

Reader’s Question:

I am 16 years old and I am planning on getting my own vehicle. I was wondering what the car insurance rates would be considering I am 16? Is there a way I can lower it?

Trish

Fairfield, CT

Do not be surprised if your car insurance premium is higher than you dad’s. That is because insurers, as a general rule, charge more to those who are more prone to accidents. Nobody’s accusing you of being irresponsible, but statistics has it that young drivers get involved in accidents more frequently than their older counterparts. After choosing the right vehicle, you must also look for the best insurance deal. Spend a few minutes and learn how to save a few or even a hundred dollars on your first car insurance purchase.

‘Cool’ isn’t that cool

Aside from being very expensive to maintain, sports and muscle cars have very costly premiums. You might want to choose an ordinary sedan. After all, everything boils down to mature attitude and safe driving.

Take time to learn more

Enrolling in more advanced driving lessons will chip a few dollars off your premium. Just be sure to pick those programs that are acknowledged by your state. Also, check out if the school you are enrolling for is recognized by your company.

Good achievers are better drivers

If you have excellent academic records, you qualify for another discount benefit. Companies generally grant students with 3.0 or higher GPA a 10% decrease from insurance premiums.

Let them know how far you are from home

Car insurers also offer discounts to students who live away from their homes. Discounts differ from one company to another so be wise enough to compare car insurance quotes before select your insurer.

Join the club

You can get a lower premium when you select the same company that insures your parents. Teens who join as a group acquire additional discounts, too.

Keep the traffic officer away

Keep your traffic record clean and you will pay less on your next payments. So keep that foot light on the gas and stay away from intoxication because your premium increases with every violation you make.

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Ways To Cut Your Car Insurance Cost

Published by author on May 26th, 2009 - in Auto Insurance Saving Tips

Reader’s Question:

I do not have the budget for continuing my auto insurance. Can I just be safe on the road and will not get car insurance?

Jane

Detroit, MI

No. First of all its illegal to drive without proof of financial responsibility. People want to reduce anything that makes us painfully spend more, including car insurance. Read on and learn ways to save on car insurance.

When shopping for car insurance, always compare, compare, compare. The technology today has afforded us ways on easier insurance shopping. Use your favorite search engine and be on the hunt for car insurance deals that doesn’t make you cringe. Compare at least three or four insurance companies. Cheap doesn’t mean substandard. Don’t let your quest for a good deal be waylaid by shady insurance companies. Do background checks. Does the company have numerous consumer complaints? How is the credit rating looking?

Consider getting all the available discounts. Bear in mind that discounts differ from one insurance company from the other. State laws also differ. Take defensive driving classes, and a 10% is taken from your premiums. Installing safety measures on your car merit discounts as well. Bottom line is, do your homework well. Know your basic state laws; you’ll be surprised how much discount you can avail.

Increasing your deductibles helps. A deductible is the flat amount an insured incurs before the companies make benefit payments. Since insurance is meant to pay the bigger amounts you can’t handle, it is wise to increase your deductibles. This drastically lowers your premium.

Purchasing the right vehicle counts a lot. Check the car reputation before buying anything. Do thieves prefer this car model over the other? How are the repair costs? Should you buy a brand new vehicle? Has a second hand vehicle crossed your mind? There are “safe” cars. The web is a rich source of information. Let your fingers do the work. Research and compare.

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Do Car Insurance Companies Look At My Credit Score

Published by author on May 25th, 2009 - in Credit Scores

Reader’s Question:

How can I make my car insurance cheap? Is it true that car insurance companies look at your credit score as well?

Patrick

Henderson, NV

Looking for cheap car insurance? Here are the things that can increase or decrease car insurance rates. Good driving record can decrease your car insurance rate. SUVs on the other hand can be very expensive to insure because car insurance companies believe that this type of car poses high risk. Females are safer drivers that men so the latter are offered with lower car insurance rate. Other than these, credit history can also be a significant determinant of car insurance rate. If you have poor credit history or do not have any credit at all, car insurance companies will view you as high risk.

The law permits car insurance companies to predict the risk that the driver poses. This factor is in addition to other determinants of car insurance rate. If the credit history shows that you pay your credit bills on time, then you will likely pay car insurance premium on time and are less likely to file claims. If, for example, you lost your job six months ago, you credit card payments would likely fall behind. Even if you were able to catch up, this would appear in your credit history and the company might consider you as a possible risk. Without credit history, you might also receive the same view as that of a driver with poor credit history.

There are things that you can do to improve your credit history. Clean up your credits. Pay the minimum amount every month. Don’t spend if you it is already beyond your means. Get yourself a credit. This can be the reason why you receive high car insurance rate offer. Because of lack of information on how you pay your credit dues, car insurance companies will automatically consider you as a risk. In this case, you’ll get high car insurance quotes. Once you have a credit, show the car insurance company that you responsible in paying your credit dues. Don’t forget to monitor your credit reports. This information can be acquired from the credit bureau. Don’t forget to check if the information is correct.

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What Car Models Affect Car Insurance Rate

Published by author on May 25th, 2009 - in Car Models Affect Rates

Reader’s Question:

How does model of cars can affect my auto insurance rate?

Pam

Cambridge, MA

Sports car are normally charged by car insurance companies with relatively high insurance rate. The reason behind this is that sports car is usually driven in speed that usually cause traffic accidents and crashes. The high chance of traffic accidents to occur also poses high chance of paying cost than earning. However, sports car insurance rate is not fixed to all types of SUVs. There are other SUV models that car insurance companies charge more than the other model. This is because there are certain models of SUV or car in general that are likely to file claims. In this case, don’t be surprised if you find out that the car insurance company that offered you sports car insurance rate offered lower to your friend whose car is also an SUV.

a. Certain models of car are more attractive to thieves and likely to be stolen while others are prone to collision or get vandalized. Car insurance companies, as a result, compensate the risk by making the car insurance rate higher.

b. In the event of traffic accident, repairing expensive cars can be costly. It follows that expensive cars has also expensive parts. The risk is then passed on by car insurance companies to car insurance premium that they offered to customers.

Car insurance providers get statistical data from Highway Loss Data. An example of this statistical data include the average amount that car insurance companies pay from claims because of collision, theft or injury according to the type or model of cars. Aside from this information, car insurance companies also use their own claims experience. Certain models or types of car receive more claims than the other. In this case, those that file claims more often are charged with higher car insurance premium. So next time you think of buying a new car, consider the type and model.

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Looking For Auto Insurance Discounts For Good Driver

Published by author on May 25th, 2009 - in Good Driver Insurance

Reader’s Question:

Can I get an auto insurance discount for being a good driver?

Shane

Elizabeth, NJ

Savings is very important for us. In everything that we purchase we always look for some way to lessen the cost. This is a practice that we commonly do in all transactions involving money; even for transactions, such as buying car insurance.

Savings is possible in purchasing auto insurance. And this can be done through car insurance discounts.

Yes, insurance companies have been giving discounts for their customers. However, getting them isn’t anything like they do in malls. They do not slash price tags for everyone to simply avail. They only give discounts for every person who meets their qualifications.

Being eligible for discounts can happen in many ways. Most insurance customers, who are privileged, are usually the excellent drivers. They are not the people who can operate in the highway fast and furious. However, they’re the ones, who have maintained clean driving record at all times.

You can also be given discounts if you have an outstanding credit record. The way you have maintained your credit will be a reflection of how responsible you are in terms of your debts. If you have done this for the past few years, definitely you will be given the opportunity to take advantage of car insurance discounts.

The examples mentioned above are just few of the many ways to get of car insurance discounts. You can avail them for having multiple vehicles and having them insured in one company. Alternatively, you can get them if you have obtained all of your car insurance from one company. If you have kids already driving and they are constantly ace students in school, you can get discounts from this too.

Therefore, every time you purchase car insurance, always bear in mind that there will always be savings. You can simply do this by knowing how you can be qualified for discounts.

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Shopping Tips For Auto Insurance Coverage

Published by author on May 25th, 2009 - in Need auto insurance

Reader’s Question:

What do I have to know before I shop for car insurence?

Miranda

Fontana, CA

Let us face it. Car insurance is not all cut and dried as companies like us to think. They have complicated clauses and even more complex ways to target the best price possible since the lower the better, right? It is better said than done. After all, the insurance jargon is already so hard to comprehend. Let us not forget the constant need for these companies to increase by using all those mandates supposedly approved by the state legislation. Just remember the tips below so as to get all you want and more for car insurance.

Know how much coverage you really need. Make sure that you are aware of the rise in repair shops’ rates and medical facilities. It is not advisable to just stick with the limit that is legal in your state. For example, you live in Arizona and the legal limit for bodily injury is $15,000 per person, $30,000 per accident and for property damage is only $10,000. If we look at it from a realistic point of view, would $15,000 pay for hospital bills if the other person is in intensive care? Or could $10,000 pay for a Lincoln Navigator that was totaled? Having excess works. There is just a little difference between the lowest limit to the next one on the tier. Peace of mind cannot be purchased.

Calculate how much you can afford to pay for auto insurance every month. Set aside a budget so that once your policy has been activated, it will not be in danger of cancellation due to non-payment. Cancelled policies on your record will reflect and will cause your insurance premium to go up.

Decide if you want a local agent dealing with your insurance policy or if you would rather go with online agents. A lot of consumers prefer dealing with those that are in their vicinity since familiarity builds trust. However, these agents are only available Mondays to Fridays. Online agents are available 24/7.

Verify the companies. Check the current rating of the companies that you are interested in. All vehicle insurence companies gets rated. Check if the company is capable of pay outs and is financially solvent. Pay attention to the experience of other people. There are forums online that will give you an in depth look at how companies treat their customers. You can also ask your friends and neighbors for their input.

Do shop quotes online. They are cheaper and faster than waiting for a live agent. Although, if you have questions about the company or you want some clarifications, the quote screen can only provide you so much. If you have the time, Contact a sales agent. They can answer your questions and also run a quote for you.

You can never go wrong by following these tips. True, they may be time consuming but it is your money and you would not want to waste in on a car insurence company that will cause you more heartache and frustration in the long run.

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