10 Small Things That Can Make Your Car Insurance Skyrocket

September 8th, 2010
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Insurance skyrocket graphic

1. The Model of Your Car

Why

Auto insurers have a system for rating your car. Factors include cost of the vehicle, how safe it is, and theft data. The result is a rating from 1 to 27. The higher the number, the higher your premium.

How Much It Could Cost You

Hundreds to thousands of dollars a year.

How to Avoid It

There’s a lot to be said for a safe, moderately priced car. While a sports car may give you that thrill you’ve been looking for, it could cost you dearly in more ways than you can anticipate. A sedan or SUV would be a much more affordable option.

2. Combine Policies with a Risky Motorist

Why

Most couples who marry chose to combine their auto insurance policies. This can be problematic if your spouse has a tainted driving record. Regardless of how spotless yours may be, theirs is also taken into account when your rate is calculated.

How Much It Could Cost You

Hundreds of dollars a year.

How to Avoid It

You can either not combine policies or make sure you ask your significant other about any accidents they’ve had before you get in too deep. If you both have good driving records, it is likely you will have a lower rate together than you would individually.

3. Lower Your Deductible

By lowering your deductible, you’re asking your insurance company to assume more risk. Your insurance company has to pay the difference between your deductible and the cost of the damage if you get into an accident. With a low deductible, the difference is always going to be more than it would be if you had a high deductible. The company makes up for this by raising your rates.

How Much It Could Cost You

Hundreds to thousands of dollars a year.

How to Avoid It

Don’t lower your deductible. If it’s absolutely necessary, do not do so by a drastic amount.

4. Improve Your Car

Why

Modifications to your car will make it more expensive to repair should you be in an accident. This will lead to higher premiums. This is especially true of modifications that make a car faster or otherwise less safe.

How Much It Could Cost You

Hundreds to thousands of dollars.

How to Avoid It

You might think that not informing your insurance provider about improvements to your car would be the way to avoid this. Unfortunately, they may refuse a payout if you get into an accident and they have no knowledge of your alloy wheels or street racing engine.

5. Neglect Your Car

Why

Vehicle upkeep may be a hassle, but it is one you cannot avoid. Were you to injure someone with your car, you could be charged with driving a vehicle in dangerous condition. That would mean, among other things, much higher premiums.

How Much It Could Cost You

Thousands of dollars.

How to Avoid It

Check your oil,  coolant,  tires,  and lights on a regular basis. If you can’t do that, bring your car to a garage.

6. Mention Past Convictions

Why

An act passed in 1974 gives a time limit to many convictions. After a set length of time has passed, you’re no longer required to inform insurers of a past conviction. Doing so would cause your premiums to rise unnecessarily.

How Much It Could Cost You

Hundreds of dollars.

How to Avoid It

Find out when your conviction will be spent, and stop sharing after that date.

7. Buy a New Car For Your Teen

Why

While a new car may be jam packed with safety features, it’s still more expensive to insure than a used car. This is simply because a car loses value over time.

How Much It Could Cost You

Thousands of dollars in both car and insurance payments.

How to Avoid It

Buy your child a moderately-priced, inexpensive, used car.

8. Have a High Yearly Mileage

Why

It’s simple probability: the more you drive, the more likely you are to get in an accident. Insurance companies wisely take this into account and adjust your premiums accordingly.

How Much It Could Cost You

Thousands of dollars.

How to Avoid It

You can use public transportation,  walk,  or carpool.

9. Live in a High-Risk Area

Why

Insurance companies keep track of local car statistics, such as number of accidents or car thefts, and increase your insurance rates accordingly.

How Much It Could Cost You

Hundreds to thousands of dollars.

How to Avoid It

Living in an area with a low population, like the suburbs, will keep your premiums low. Next time you move, you may want to consider this as a factor.

10. Have A Low Credit Score

Why

More and more insurance companies are factoring your credit score into your rate. A bad credit score implies you’re more of a risk to insure. If it’s bad enough, you might even be denied insurance.

How Much It Could Cost You

Up to 50% more.

How to Avoid It

Pay your bills on time and enroll in a credit reporting program so you can fix any credit issues that arise.

By avoiding the pitfalls that can cause your auto insurance to skyrocket, you’re in a good position to get and maintain an excellent price on your car insurance. Make sure that you shop around using a site like Autocricket.com to find the most competitive rates!

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