Let’s say you need a new car insurance policy. Maybe you’re a new driver, or buying a new car. So you start calling around for car insurance quotes. To your horror, each quote is more expensive than the other. Do you know why this may be? There are several possible reasons.
The first thing an auto insurance company does before it issues you a policy, or even a quote for auto insurance, is to look up your driving record. This is easy for them to do, and you can even do it yourself, if you want to avoid unwelcome surprises. Just call the Division of Motor Vehicles in your state or the state where you last had an insurance policy.
It is standard operating procedure for an auto insurance company to do this before issuing anyone a policy. They want to be sure the driver is a safe driver and the car being driven is one that is likely to be safer than others.
Your rates increase for every accident you have and every claim you make!
If your car insurance quotes are higher than you’ve ever gotten before, there are several possible reasons for this. One is that you may have had several auto accidents, especially in the last three years. Sometimes that is reason alone for the auto insurance company to deny you insurance altogether, or jack up the price to cover what they consider their risk. But if having a car insurance policy is a necessity for you, as it is in every state but New Hampshire, and you want it to be as reasonably priced as possible, here is what you can do about it:
Ask your insurance agent what the rates are for the various cars you are thinking of buying. You’d be surprised to see which will earn lower car insurance quotes. Or you can pay a higher deductible so that your premium decreases.
There are also possible discounts, especially if you’ve had no accidents or convictions. If you are a student, ask about any discounts they may have for good students. You will have to prove you are one!
In addition, there are usually discounts for safety features in the car such as anti-lock brakes and air bags.
Most important, always comparative shop as many insurance companies as you can. They all have different rates. Do your research by asking around or looking through Consumer Reports.
The good news is that penalties for poor driving records vary according to the state in which you live. In some states, you may not have an increase in premium for only one accident!