If you’re a first-time car buyer, navigating car insurance can be tricky. It’s hard to understand the jargon, what happens when you make a claim and what factors affect your insurance. Car insurance companies are also guilty of making the process sound a lot more complicated than it is. Here are eight things car insurance companies won’t tell you.
Insurance Is Tied to The Car, Not the Driver:
if you let someone else drive your car, most insurance policies will cover the damage if there is an accident.
Several Factors Go Into Deciding the Cost of Your Policy:
These include the value of the car, the type of vehicle, the safety features of the vehicle, and how many miles you drive per annum.
Your Driving Record Affects Your Insurance:
Insurance carriers can access an exhaustive database of any claim you’ve made or asked about making. They also have access to your record – how many accidents and road violations you’ve been involved in. This will all affect your premiums.
You Are Entitled to One Free Copy of Your Insurance Report Every Year:
This includes information from two databases: the Comprehensive Loss Underwriting Exchange (CLUE) and the Automated Property Loss Underwriting System (A-PLUS). You can check your report every year and dispute any inaccuracies you find. This does not affect your credit score.
Your Credit Score Matters:
Your credit score is a very important factor in determining your insurance premiums. Buyers with credit scores that are low may be charged higher rates. This is because the company tries to account for greater expenses in covering any future claims that come in.
Where You Live Impacts Your Premium Amount:
If you live in Louisiana, Florida, Rhode Island, or Connecticut, your premiums will be on the higher side. However, residents of states like Vermont, Ohio, Virginia, Idaho, and Iowa will enjoy lower premiums on average.
Your Age Affects Your Insurance:
Reports show that premiums tend to be highest when the driver is between the ages of 18 and 25. They start going after 25 and stay static for drivers between 30 to 55. Then your premiums will start getting higher till you are 75 and will be pretty high after 75.
If You Bought Your Car by Applying for A Loan, Your Insurance May Be Higher:
The bank wants to protect its investment. If you bought your car on a loan, you may also be required to buy comprehensive and collision coverage. This tends to be more expensive than coverage policies that don’t cover collision and Comprehensive. You have more flexibility when it comes to choosing coverage policies if you own your car outright.
