In these kinds of rough economic times, you want to save wherever you can. One of the most obvious places where you would want to save is in your car insurance premiums. But so many factors influence premiums, and all too often you seem destined to pay more and more as time goes on. Don’t give up! You, too, can save on your car insurance if you’re willing to put in the effort to become a low-risk driver. By doing your best to be a safe driver, car owner, and insurance policy holder in all aspects of your life, you can save in many different ways and enjoy the same great coverage with more spending freedom.
Car insurance companies calculate your overall risk level by taking into account things like your driving history, your age, the type of car you own, and your credit score. There’s no way to find out for sure what they rate you as, but you can look at the same things they look at and then make a reasonably good educated guess at your risk level. The first thing to do to save on your premiums is to remember these things when you’re first shopping for a car or an insurance policy. By buying less flashy, subdued car models, you reduce your risk. Buying insurance only when you have a good credit rating is also a very sensible idea. You don’t want to be stuck with awful premiums because of a temporary slump in your credit rating, do you?
Another thing you can do, and frankly you should be doing it anyway, is to avoid accidents on the road. Besides the expenses involved in the accidents themselves, car insurance companies will unflinchingly raise your insurance premiums up if you’re proven to be at fault for a recent driving accident. If this has already happened to you, then don’t despair. You can still work your way back down to lower premiums, it will just take a long time of driving safely. Avoiding accidents and other traffic altercations will save you money and trouble in every possible way.
Note: Accident “forgiveness” - some auto insurers offer a first accident “forgiveness”; they will not increase your premiums for your first accident. Check with your company to see if they offer this coverage and how you can qualify. Did your friend borrow your car and have an accident? You’ll have to file a claim unless their own insurance covers them. If they are uninsured, and the damages exceed your coverage, the injured party may take legal action against you for damages and injuries. On the other hand, if your friend did not have permission to borrow your car you won’t be held liable in many cases.
Another factor in your premiums is your car’s real value. When determining replacement value, many insurance companies check with local dealers to find what they sell similar cars for. If you think your car is worth more than what the insurance company is offering to pay, you can dispute this. If you’ve made upgrades to your vehicle with special parts, etc., be sure your company knows this so the extra value is covered. If you’ve had regular routine maintenance or extra low annual mileage, produce these records to show the company your car is worth more. You can also plan ahead with “gap” insurance, which would cover the difference between what you owe and what insurance would pay you.
If you feel that your car insurance company drastically undervalues your car, don’t worry, there are measures you can take to remedy the situation. Gap insurance exists for just such times, and will cover the other expenses your car insurance company is ordinarily unwilling to cover. It can make a big difference and save your neck when your bad luck places your damages at just a bit over the coverage your policy offers.
If you are the parent or legal guardian of a licensed teenager who will be using your vehicle, then you must remember to inform your insurance company of this. If he or she gets into an accident and your insurance company hadn’t been informed, they are entitled to charge you back premiums from the date the teenager became a licensed driver. You must also remember to officially cancel your policy in the event that you switch insurers. You officially notify them by informing them in writing of your decision to terminate your policy. Make sure you give the exact date you want coverage ended, or you may find yourself without any coverage, before your new policy comes into effect. This is easiest to do by calling them and talking with an agent. Once you have informed them they will send you a cancellation request, already filled out and requiring only your signature.
Susan Reynolds is the content coordinator for a leading South African Insurance Provider who specialises in Car Insurance Policies.
Tags: auto insurance, automobiles, car insurance, cars, insurance, personal finance, vehicle insurance