Lower Those Auto Insurance Premiums

It can be very difficult to find the best premiums for car insurance. After all, car insurance companies do not make their methods of calculating premiums public knowledge. However, while you may not be able to figure out exactly what factors insurance companies are weighing, it is known that your credit score plays a significant factor. This is because studies have shown a connection between your likelihood of filing a claim and your credit score. Insurers figure also that someone who has had the same credit accounts for a long time, and who pays bills on time, is likely a stable person, and less of a risk for driving poorly.

Therefore your car insurance risk score is likely going to be related to your credit score. That being the case, if you have had unusual credit activity recently, it would be wise to wait until a month after it has stopped and your credit activity has returned to normal before trying to buy car insurance. Most car insurance companies use a method of calculating car insurance risk devised by the Car Insurance Services Office. It begins by taking the cost of the vehicle as a base and then factoring in safety and theft data for that make and model of car.

Note: You can keep premiums down by keeping small claims down. If you’ve had items stolen from your car, such as a CD collection – file this on your homeowner’s insurance. Bad drivers will pay more in premiums – including you if you drive badly. You can pay up to 40% more after your fist at-fault accident. This is the industry standard, although not all insurance companies follow this guideline.

In the event of an accident contact your insurance company about its forgiveness policy, if any, and see whether or not you qualify. Some companies have a policy of forgiving each client’s first accident. Some companies will forgive the accidents of certain qualified clients. You should also be aware that if a friend, using your car, gets into an accident then you will have to file a claim with your insurer. If your friend is uninsured and causes damage that exceeds your coverage then you may be held liable for damages.

Each auto insurance company figures the worth of a vehicle in a different manner. All of them keep their own lists of car values (like the Blue Book list). Some companies may ask local car dealers what they’d charge for a particular vehicle. Gap insurance might be worth purchasing, as it might pay the difference between what your insurer will pay and what you actually owe. Keep any maintenance records you have, especially of oil changes and routine checks by a qualified mechanic, or special parts, or upgrades. These will be factors in figuring what gap insurance will pay.

If you feel that your car insurance company drastically undervalues your car, don’t worry, there are measures you can take to remedy the situation. Gap insurance exists for just such times, and will cover the other expenses your car insurance company is ordinarily unwilling to cover. It can make a big difference and save your neck when your bad luck places your damages at just a bit over the coverage your policy offers.

If you find another car insurance company that offers better deals, you can switch to them. This means telling your old company to cancel your policy. This is a simple procedure, and all you have to do is notify your old company in writing on the date you’ve chosen to cancel. Just be sure to have the newer policy ready to go as soon as you cancel the old one! If there’s a gap, then you’ll be uninsured for a little while, and getting into an accident during that period of time can be a total disaster. Shop safe and smart and you’ll have no regrets about this simple procedure.

Susan Reynolds is the webmaster for a leading South African Insurance Provider who specialises in Car Insurance Options.