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Car Insurance - 5 Things You Didn't Know About

Car insurance is something many people take for granted until they actually need it, whether it’s to replace a totaled vehicle or to help pay medical bills from an accident. There are so many elements of car insurance, however, that most people don’t know all the ins and outs of what they’re buying, leading to misconceptions and mistakes that can end up costing you time, money and headaches down the road. The following five things you didn’t know about car insurance will help you make smarter decisions the next time you shop around for new coverage or renew your current policy.

 

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Car insurance premiums vary by state

Many consumers assume that state regulations mean they will pay similar rates no matter where they live, but that’s not always true. In many states, including Texas and Alabama, auto insurance premiums are determined by both your location and your driving record. If you have a great record in one area but lousy credit or an outstanding warrant in another, you could be stuck paying higher premiums on a car insurance policy than a driver with a clean driving record who lives down the street from you.

 

Why your credit score matters

Not only does your credit score impact whether or not you qualify for a loan, but it also affects your car insurance rates. That’s right; your credit history can affect how much money you pay to insure your vehicle. So, keep an eye on your credit score and make sure that it stays in good standing! #1 - Your Credit Score Matters If you have bad credit, then car insurance companies may try to pull a fast one on you.

 

How you drive affects your rates

If you are only looking at car insurance rates based on your experience, you may be doing yourself a disservice. It’s important to look at how you drive and not just your experience level when determining insurance costs. Any time you are ticketed or get into an accident, even if it was not your fault, that can have an impact on your premiums. In fact, studies show drivers with poor driving records pay higher premiums than drivers with more experience and fewer tickets.

 

Shopping around is a smart move

Before you sign up for a car insurance policy, it’s smart to compare what you can get from at least five different companies. Shopping around online is relatively easy and can help you save time and money on your policy.

 

Picking the right deductible can save you money

It’s one of many factors that impact your car insurance premium, but picking a higher deductible when you’re filing a claim can save you money. How much depends on how often you drive and where you live. (Insurers know that people who live in an urban area are more likely to get into accidents than those who live in more rural areas, for example.) But if you have a safe driving record, opting for a higher deductible could mean substantial savings over time.

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