Discount Car Insurance – Essential Knowledge and Battle Tactics
You spent a great deal of time shopping around to find the best deal on your automobile. So it only makes sense to explore tactics and tips to get discount car insurance and optimize your coverage. You may think it’s impossible to get quality coverage while paying less for it — essentially getting something for nothing — but you’d be surprised at how the application of a few common sense (if at first counterintuitive-seeming) principles can indeed help you reach discount car insurance nirvana.
Principle #1: You will pay less if you have good credit.
Studies have shown a direct correlation between your credit score and the likelihood that you will file a claim. For this reason, almost all insurers will pull your credit report and analyze it. This will demonstrate whether you pay your bills on time and will reveal if you have had any run-ins with creditors. Ideally, you want to look as stable as possible — so if you pay late, frequently open and close accounts, and have a low FICO score, you will be a higher risk driver. All this info will be used to create something called your “insurance risk score,” which your carrier will use to determine your rate.
Tip: Your insurance risk score is very similar to your credit score. If your credit history is not strong, start cleaning it up ASAP. Get free credit reports from the official website, www.annualcreditreport.com. Once you’ve fixed your credit, wait about a month for it to return to normal before shopping for discount car insurance.
Principle #2: The type of car you drive impacts your premium.
Insurers have a rating system for every car make and model. Most use a system devised by the Insurance Services Office, which starts with the cost of the vehicle and then factors in safety and theft data. Cars are given a rating from 1 to 27. The higher the number, the higher your premium.
Tip: You can look up your car’s relative risk online. Before buying a new car, call your insurer and ask about the difference in premiums for the car models you are considering.
Principle #3: Pay your discount car insurance premium in full to avoid installment fees.
“Fractional premium” fees will be charged to you when you pay your premium in six month, quarterly, or monthly installments. These administrative fees can really add up.
Tip: Ask about fees for paying in installments. If the fees are small enough, it may be worth it. If not, consider paying your bill in a lump sum annually to save.
Principle #4: Leaving your laptop in your car isn’t covered.
Stolen or damaged personal items are not covered by your discount car insurance policy.
Tip: You can file a claim for a stolen property on your homeowners insurance, which can cover smaller and less expensive items. You may need to add a rider to your policy to get this coverage. It’s always wise to take photos of expensive personal items and to catalog documentation in a safe place (such as a fire proof deposit box).
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