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20 Car Insurance Secrets You Aren’t Supposed to Know

Follow our car insurance tips to get the best rates

Hit By an Uninsured Driver

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 rating. 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. Give your current insurance provider a call!

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. Car insurance rates that look cheap probably are cheap, and you may find that your collision and comprehensive coverage barely covers you for anything at all.

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. Collision coverage and car insurance costs vary from policy to policy, so make sure you know what you’ve signed up for.

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. Still, a clean driving record will help you secure better and cheaper insurance coverage.

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. Many auto insurance companies offer discounts, saving you hundreds of dollars, when you combine other policies, such as home and auto, and even life insurance. It’s worth getting a new insurance quote covering other policies just to see how much money you can save by switching from your current policy.

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
  • Multi-Car
  • Paperless
  • New Vehicle (anything less than five years old)
  • SmartRide

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, because you can save money. 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.

Bonus: 5 Costly Auto Insurance Myths Debunked

A recent survey of Americans found that many believe myths about what car insurance covers and what it doesn’t. How many of these 5 myths can you get right?

In fact, many Americans are misinformed about the basics of auto insurance, from how premiums are set to what a policy typically does and doesn’t cover, according to a recent survey of 1,000 adults conducted by Princeton Survey Research Associates International.

While many consumers do understand how auto insurance works, others are mistaken in some pretty surprising ways. Here are five common myths about auto insurance revealed by the survey.

Myth 1: Red Cars Cost More to Insure

Almost half (44 percent) of respondents mistakenly think driving a bright red car changes the cost of auto insurance. Drivers 18 to 29 years old were most likely to buy into this myth. A slightly higher number of consumers (46 percent) correctly stated car color has no effect on what you pay.

Reality: The color of the car you drive doesn’t affect your insurance premiums, but the kind of car does.  For instance,  a high-end sports car is likely to cost more to insure than a compact car.


Myth 2: Your Car Insurance Doesn’t Cover You if You Caused a Crash

Slightly more than half (56 percent) of respondents correctly stated that auto insurance covers you when an accident is your fault. But 37 percent of respondents overall (and 52 percent of those aged 18 to 29) incorrectly stated they wouldn’t be covered if they caused a collision.

The confusion might stem from the fact that some consumers carry only liability insurance, which covers damage they cause to others if they’re at fault in a crash, but doesn’t pay to repair or replace their own car.

Reality: Liability insurance, required for driving in nearly every state, covers damage you cause to someone else’s car (or other property) plus medical costs for injuries when you’re at fault in an accident. Collision insurance, which is optional, covers damage to your own car, even if the accident was your fault.


Myth 3: If Your Car is Totaled, Your Insurer Cuts a Check for the Amount the Mangled Metal is Worth After the Crash

Half of consumers know that if your car is totaled, the insurer pays you what your car was worth before the crash. But 28 percent mistakenly believe their insurer pays only the post-crash value of the car, and another 12 percent just don’t know.

Many drivers aren’t sure what happens when a car is totaled simply because it’s a rare event, says Jack Hungelmann, author of “Insurance for Dummies.” He adds: “It might happen once in a lifetime.”

Reality: Auto insurance pays the market value of your car before the crash, Hungelmann says. Some policies now offer new-car replacement, which means the insurance company would pay the amount the totalled car would cost new rather than the depreciated value.

Myth 4: Your Auto Insurer Pays for Mechanical Repairs

Overall, only 14 percent of respondents mistakenly believe that auto insurance covers car breakdowns and other mechanical problems. But younger respondents (23 percent of those aged 18 to 29) and those who make less money (23 percent of those who make less than $30,000 a year) were more likely to believe insurance covers routine car repairs.

Reality: Car insurance doesn’t cover mechanical problems with your car, unless they’re directly related to an accident.


Myth 5: Car Insurance Covers Belongings Stolen from Your Car.

About one-third of respondents (34 percent) incorrectly believe auto insurance covers items stolen from your car. Older consumers (47 percent of those 65 and over) were more likely to believe they’d be reimbursed by their auto insurer if a thief snagged their smartphone, laptop or other item of value off the front seat.

Reality: Your car insurance doesn’t cover the contents against theft. Your renters or home insurance covers items swiped from your car, as long as whatever is stolen is worth more than the deductible. So, if you had a covered $2,000 laptop stolen and your homeowners insurance has a deductible of $500, you’d get a check for $1,500.


Final Car Insurance Tips

We’ve shared some of our best car insurance tips with you today and debunked some enduring myths. 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.

About Brian Jones

Brian Jones spent over 30-years at various dealerships as an ASE Certified Master Tech. These days he works with those dealerships to create quality automotive content while spending more time with his family near Dallas, TX. In his spare time, you'll still find him playing with tools, cars, and many other "manly" gadgets. Brian's passions include traveling, pickup trucks, and anything related to motorsports.