Why is my car insurance so high? This is a common question. Below are some of the factors that impact auto insurance premiums, along along with ideas on how to decrease premiums. Here you can find helpful information on why insurance premiums increase.
Claims, Tickets, Accidents
Statistics show that those who file claims, receive tickets, and cause accidents are at higher risk, and are more likely to file claims in the future. Therefore, premiums are higher, at least until time transpires (usually 3-5 years) from the incident. These incidents could lead to a surcharge (premium increase) or a cancellation, depending on the type, number, and severity of the incidents. Taking precautions and driving safely helps prevent these incidents from occurring in the first place. If a loss does occur, do your research and talk to your agent to determine if a potential surcharge or cancellation is worth filing a claim.
Mileage
The more miles you drive, the more likely you are to be involved in an accident. Many auto insurance companies offer telematics discounts that reward those who drive less with discounts. Telematics trackers can be a mobile app or connected to the vehicle. In addition to mileage, they will also often track braking, speed, distracted driving, and time of day driving. When deciding on whether to enroll in a telematics program it is important to determine whether you could be penalized with a surcharge.
Credit
Car insurance companies do not use the same credit score as the credit bureaus, but they do use a credit-based insurance score in determining premiums. These scores are pulled when starting a new policy, and every few years, which is sometimes required by law. Maintaining a good credit score will help with auto insurance premiums. If your score has recently improved, some car insurance companies may offer the option to pull a new score, and your premium will be adjusted accordingly.
Car Insurance Coverage
The more coverage you carry, the higher your premiums. You can lower your premium by lowering your coverage.
- PIP/Medical – Much of what is covered by medical or personal injury protection coverage is already covered by health insurance, so if you have good health insurance you could consider removing or lowering these coverages.
- Deductibles – Increasing deductibles is a great way of decreasing premiums. Consider how much you could afford to pay out of pocket if you did need to file a claim. Increasing the collision, as opposed to the comprehensive deductible, can make a bigger difference in premiums. Collision covers at-fault accidents, you do not want to use it unless it is a relatively severe accident, since doing so usually leads to higher rates. So if you are not going to use collision for small accidents, it does not make as much sense to carry a low deductible.
- Rental – Removing rental car coverage, and paying out of pocket for a rental car if necessary, is another option for lowering premiums without sacrificing the most important coverages.
- Liability/UMBI – Decreasing liability or underinsured motorist bodily injury coverages is not recommended, as these are very important coverages. Interestingly, carrying higher liability limits can help you to qualify for lower rates in the future, as insurance companies have found that those that carry higher liability limits are lower risk.
Discounts
Discounts, or lack thereof, can make a big difference in premiums. Bundling auto insurance, home insurance, renters insurance, umbrella insurance, business insurance, and life insurance with one insurance company can lower premiums significantly. Many car insurance companies also offer good student discounts and discounts for paying in full or having premiums automatically withdrawn from a bank account.
Contact Chris Elliott Insurance Agency for Auto Insurance in Greater Seattle!
Our Seattle insurance agency regularly helps drivers make the most of their insurance dollars. That means carrying coverage that is needed while not paying more for coverage that is not, and including all available discounts. In addition, we offer award-winning service and excellent coverage from reputable insurers. Contact us to get the most out of your auto insurance policy!
