5 annoying reasons you're not getting the best car insurance rates - what is the best car alarm
The formula for car insurance prices can be a real black box.
Your insurance rate may be affected by factors that you cannot control or even know.
A recent study by NerdWallet found that just by shopping around, people can save an average of $859 a year, because the pricing between companies is very uneven for the exact same coverage.
Here are five reasons why you may be punished for car insurance rates. 1.
You have a fair or bad credit. Some studies have shown a correlation between lower credit and higher driver claim opportunities.
While consumer advocates believe that the use of credit in pricing may be discriminatory, insurance companies in most states are allowed to take credit into account.
So even if you pay your car insurance bill with due diligence on time, if the other bills are already behind and your credit is reduced, you will pay more for the car insurance.
Only California, Hawaii and Massachusetts prohibit the use of credit in car insurance pricing.
A recent analysis by NerdWallet found that bad credit can push up your insurance rate more than it does to trigger a car accident. The solution?
You can improve your credit score over time.
At the same time, shopping with at least five operators. 2.
You are a loyal customer and a lot of us have inertia in terms of car insurance: unless we have a bad experience, we are likely to stay in the same company year after year.
Car insurance companies are also paying attention to us.
The industry has developed a sneaky system called price optimization.
"Insurance companies test prices to rise slightly and analyze the data to guess which customers may stay still even if interest rates rise.
The insurance company then applies the rate hike to these people for no other reason.
This practice is legal in most jurisdictions, but some states have banned it.
Price optimization is prohibited in California, Delaware, Colombia, Florida, Maine, Maryland, Ohio, Pennsylvania, Rhode Island and Vermont. 3.
You drive high-
Risk carIf has someone else who crashes the same model as you often do, and no matter how good you drive, you will pay more for insurance.
This is because your rate is partly based on the "claim experience" that your insurance company sees in that model ".
This is especially true if you purchase collision and comprehensive coverage, as in various cases, collision and comprehensive coverage can cause damage to your own vehicle.
If the vehicle of your choice happens to attract inexperienced drivers, they tend to crash more frequently, which may increase the price of your vehicle.
Or you have a gorgeous sports car: same problem.
Car insurance rates for sports cars are usually the highest, as insurance companies pay huge claims to speeding drivers.
Minivans and minivansor medium-
If you want a lower price, the suv in the right size. 4.
You have contacted your agent to consider whether it might be a delicate decision to make a claim.
You may think your insurance agent can give guidance on whether it's worth it, but take a moment to reconsider before you pick up the phone.
Let's say you hit the bumper in a pole in the parking lot.
If you report the damage to your agent, even if you have never made a claim, the investigation may be on the record and may affect your rate.
This is especially correct if you have multiple "inquiries" in your record.
The actual claims and queries are recorded in a database called C. L. U. E.
Operated by LexisNexis, many insurance companies have access to the company.
This means that other insurance companies will see your inquiry, which can be bad for you when you buy a new insurance.
If your question is only about whether the cost of repairs exceeds your deductible, it's better to take a moment to find out about your car policy.
If you only purchase liability insurance, your insurance company will not pay for any damage to your car in any case.
Check out the "statement page" of the policy to find out what insurance you have purchased. 5.
You have not asked for a discount yet and you may think that your insurance company will automatically apply for all the discounts you are eligible.
But you may not get the best price if you don't ask often.
For example, your insurance company may have ignored your car alarm, which means you missed the discount.
In some cases, your insurance company or agent may not know at all that changes in your life can lead to a drop in interest rates.
For example, your insurance company does not know if you have reduced your commute, which may result in a lower rate.
Unless you provide evidence and ask for a good student discount, it will certainly not know that your child has achieved good results.
Insurance companies have a lot of discounts and it's hard to keep track of them.
There is no cost to ask your agent to review the available discounts, so you can also.
Amy Danise is the editor of the personal finance website NerdWallet.