If you’re on a budget, one of the first things you may consider is cheap auto insurance. Shopping around for different car insurance rates can be time consuming and overwhelming. There are easy steps you can take to start saving money today with any insurance carrier. The important thing to know is how exactly auto insurance carriers determine your premiums. Once you understand the basics of car insurance, you can be on your way to cheap auto insurance in a matter of minutes.
Your Insurance Score & Premium Rates
Your premium rates are determined by a number of factors, double checked through a wide variety of systems, such as:
- Your claims history and motor vehicle record
- Your credit report
- Average mileage driven in the past
- Vehicle registration
- Possible undisclosed drivers living at the same address
- Your current auto insurance carrier
- Your home ownership status
- The neighborhood you reside in
In addition to YOUR score, the vehicle you are considering insuring has a score as well, known as an “ISO rating.” This is determined by things like:
- Make, model, year
- Safety ratings
- Previous loss records of similar vehicles
The higher either (or both) of the scores are, the higher your insurance premiums will be, regardless of which auto insurance carrier you choose.
Do Traffic Tickets Really Raise Your Premium?
The answer: Not necessarily. Certain types of moving violations get a higher “score” than others when your insurance carrier considers the cost of continuing business with you. Your insurance company has a surcharge schedule, which details types of moving violations or traffic tickets and assigns each type of violation a score based on a points system. You can ask your insurance company or agent for a copy of this surcharge schedule and help walking you through the scenarios you are most likely to see in your area.
A basic rule of thumb is that non-moving offenses such as parking tickets are worth less than moving violations such as speeding tickets.
How long do moving violations affect my premiums?
This varies state-to-state, but typically your auto insurance agent can see the violation date and know when it will drop off your record, allowing your premiums to lower as well. You may ask your auto insurance agent when the company will stop charging a surcharge for the offense, but keep in mind, it will only change after the next renewal term following the drop-off date.
What Can I Do Today for Cheap Auto Insurance Rates?
The quick answer: Talk to your agent! While many discounts are not spelled out on the insurance company’s website or brochures, there are tons of discounts available that you may qualify for, such as:
- Low mileage discounts
- Going paperless discounts
- Discounts for completing a driver improvement course
- Early renewal discounts
- Discounts for affiliation with your employer or alma mater
If you’re a recent college graduate, a large family, or a senior on a fixed budget, finding cheap auto insurance can be a financial lifesaver. You can easily save money simply by understanding how car insurance works and which discounts are available to you. Talk with your auto insurance agent today to start saving money.