20 Car Insurance Secrets You Aren’t Supposed to Know
Follow our car insurance tips to get the best rates.
Published November 4, 2018
One of the major expenses we all face is our vehicle insurance. We dread making the payment and rarely use the coverage, yet the premiums continue to go up every year. We’ve collected some car insurance tips that the big companies don’t want you to know. Hopefully, these help you understand the industry and keep your rates down slightly.
20. Your Education Level Matters
Of all the things your insurance premium is based on, this one can be adjusted if you decide to head back to school. Insurance costs are actually affected by your education level, so you might want to consider learning something new.
The trouble is, this way of rating people is slightly discriminatory in nature. Have you witnessed high school dropouts driving worse than college graduates? Just because someone can’t afford college doesn’t make them a bad driver, or any more at risk. What’s worse is the insurance companies are hitting them in their wallet even though they don’t have a college degree to earn more money with.
19. Women Tend to Pay Less
Despite recent efforts for women to receive equal pay as men, our society still gives men a higher salary. We don’t know if that’s related to the reason that women pay less for their car insurance or not, but most women have lower rates.
If you take a man and a woman from the same part of the country and of the same age, the woman will almost always pay less. In fact, women under the age of 25 seem to spend the least. The reason behind this is the women are less likely to be pulled over and they don’t get in as many accidents. Women tend to drive fewer miles and are more conscientious about being safe.
18. Your Credit History is Important
Of course, you expect your insurance company to look at your driving record before offering you a quote, but did you know they also examine your credit history? What in the world could your financial history have to do with the way you drive your vehicle?
Despite anything concrete, quotes continue to prove that people of the same age and in the same place pay different premiums based on their credit score. We aren’t sure how a poor credit score makes you a bad driver, but according to the insurance companies, it does.
17. Your Location Matters
Aside from your driving record, where you live makes the second biggest difference. While it might seem like discrimination, your car insurance is going to be higher in areas with large instances of car theft and accidents.
If your insurance is that expensive, maybe you want to think about moving out of state. Make sure you check out our car insurance map to find average premiums by state.
According to Business Insider, the highest premiums are in Michigan with an average $213 premium per month. The lowest appears to be Ohio with an average $77 payment per month.
Depending on how expensive your auto insurance is, you might want to consider moving to a new state!
If you end up moving, make sure you recover your refund from your old premium. This is one of the car insurance tips that most companies don’t want you to know exists.
16. If You Stick With the Same Policy, You Won’t Get Deals
Your insurance company has no interest in offering you deals while you remain a customer. Even if you have the same car and you haven’t had any accidents, don’t expect your rates to get better. In fact, they might just get worse.
Your best bet is to shop around for a new policy. Other insurance companies might give you a good deal to sign up with them. The biggest one of the car insurance tips is that you’re expected to stay with the same company and never question your rate. That’s what’s expected of you.
What’s worse is that many people sign up for automatic renewals in their contract. This means they allow the company to take the money out of their accounts without any question. Those people might not even know that their policies change.
15. Younger Drivers Pay More
We’ve already discussed in the car insurance tips how young women pay less for car insurance, but insurance companies, in general, are cautious with young drivers overall. Anyone under the age of 21 is a threat to them.
The younger a driver is under this age the more expensive your insurance becomes. This doesn’t even take into account the home address, education or gender of the driver. Some studies suggest that teen drivers might pay over 200% more than an adult. That’s why teenagers often can’t afford their own insurance without help from their parents.
14. Early Offers are Low
This is one of the biggest car insurance tips you need to remember. If you end up in an accident or need a claim, you need to keep this in mind. This is even truer if you’re dealing with someone else’s insurance company.
The initial offer is going to be lower than what you’re probably entitled to. Don’t automatically accept their first offer. Attempt to get them to go higher and then tell them you need some time to consider it.
13. Premiums Rise Once You Turn 70
We’ve talked about how younger drivers pay more, but so do older drivers. Because insurance is all about statistics, it makes sense that people over 70 would pay more. The reality is that drivers over that age tend to suffer from more medical conditions that pose a risk on the road.
Older adults tend to be involved in more road accidents, so it’s only logical that the rates should go up. There are a few states which will lower those rates if the person takes a driver safety course.
12. Insurance Companies Care More About Shareholders than Clients
No matter what situation you’re in, it’s important to remember this. Your insurance company will always care more about making a profit for the shareholders over taking care of you.
Don’t let them push you around. At worst, you should find an attorney and fight back. Of all the car insurance tips we offer, this is the one that requires the most work. Be prepared for a battle if you go this route.
11. Don’t Sign Anything You Don’t Understand
When you plan to insure your car or purchase a new vehicle, you need to make sure you don’t jump at every first offer. Take your time and evaluate everything you plan to sign. If you receive a quote for a cheaper premium than anywhere else, be wary.
Most times if something looks too good to be true, then it most likely is. Read all the small print or have an attorney help you decipher it.
10. Pay Outs Don’t Happen Fast
If you expect an insurance company payout to occur quickly, you need to read more car insurance tips. Just because you have automobile insurance doesn’t mean everything gets taken care of promptly. Your medical expenses and repairs won’t be a top priority to the company.
First, a full investigation has to occur. Even after that, there will be plenty of back and forth regarding the offer. It might take weeks before you see a penny which puts many people into debt as they wait. This is a common tactic to get you to accept their first offer (see #14).
9. When You’re Hit By an Uninsured Driver, You Might Not Have Protection
Read your small print carefully to see what type of coverage you have regarding uninsured drivers. The cheaper plans often don’t give you any financial protection.
Typically, when you’re involved in an accident that isn’t your fault, the other company pays out. If you’re hit by an uninsured driver, you don’t have another company to deal with. That’s why some states require that you carry uninsured driver coverage, but you might want to have it no matter where you live. You don’t want to incur the expense of what happens when you don’t have it.
8. Your Driving Record Makes a Difference
It’s expected that the insurance company plans to look into your entire life before giving you a premium. The first thing they examine is your driving record. They will check for speeding infractions and whether you’ve driven under the influence. All your accidents make your rates rise as well.
Insurance premiums aren’t supposed to rise for accidents that weren’t your fault. Since most people have premiums that increase every year, it’s difficult to prove if they use it against you or not.
7. You Might Have Enough Insurance When You Rent a Car
When you agree to rent a car, they often try to get you to add more insurance. Before you do that, take advantage of one of the wisest car insurance tips and check your own coverage first.
Most policies that have comprehensive or liability coverage allow you to drive other vehicles. This includes rental cars, as long as they are around the same value as your vehicle.
If you want to upgrade, you might prefer to take out a little more coverage just to be sure. Just don’t sign up for the first pitch without considering what you truly need.
6. Consider What Car You Plan to Drive
The type of car you drive has a significant impact on your premiums. If you want to purchase an American car, we’ve evaluated all the highest and lowest premiums of American vehicles.
The more expensive your car is and the more it costs to repair or replace, the more you can expect to pay for insurance.
5. Adjust Your Deductible
If you want to save some money, but still want decent coverage, we have one of the most ingenious car insurance tips ever. Instead of lowering your coverage, consider changing the deductible instead. You want full protection, and this allows you to keep that.
If you have the money to handle a $1,000 loss then you don’t need a $100 or $250 deductible. Bump that up and keep money in savings to cover the expense should you need it.
Talk to your insurance company to determine how much you’ll save by making this small adjustment.
4. Combine Policies
If you have multiple insurance policies on various objects, you might want to consider combining them. Many carriers offer additional savings when you do this, plus it makes things more convenient.
Most consumers choose to combine their auto and homeowner’s policy together.
3. Claim the Discounts You’re Eligible For
Most car insurance companies provide plenty of discounts. You might be able to get a discount for your safe driving, but some of the other cuts are quite surprising. This is one of the many car insurance tips that most people aren’t aware of. For example, did you know that you could get a discount for being a member of the United States Chess Federation?
Here are some other discounts you might be eligible for:
- Good Student
- New Vehicle (anything less than five years old)
Make sure you ask your insurance agent what’s available for you.
2. Compare Prices Annually
The most important car insurance tips revolve around getting the best rate. It makes sense to take the time each year and compare rates between companies. With the newest technology, it only takes but a few minutes to compare the varying rates. The best part is that none of these inquiries should hurt your credit score.
1. Pay Semi-annually
Most insurance companies operate on six-month policies. When they renew your plan, you have two payment options available to you; pay it all at once or pay monthly. If you choose to pay monthly, you will pay more. They will tack on extra charges to you.
Normally, you can expect to save a few percentages by paying your policy outright at renewal time.
Final Car Insurance Tips
We’ve shared some of our best car insurance tips with you today. Hopefully, you find that these save you some more money and help you have a leg up in the industry. Let us know what your best car insurance tips are and how you plan to save more on your premiums.