7 Common Mistakes to Avoid When Shopping for Low Cost Auto Insurance

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	Low cost auto insurance is not oxymoronic; it’s possible to buy quality insurance at a reasonable price, and still get good service. The trick is to avoid common mistakes when shopping for your car insurance. 1. Understand that the insurance agent is not your buddy. He is a salesman, and if he is paid on commission, it’s in his and his company’s best interests (not necessarily yours), to encourage you to buy coverage that you may not need. If he’s not on commission, he may actually discourage you from buying insurance that you might otherwise need, because smaller policies mean less exposure to the insurance company, and proportionately, less risk. 2. Get a copy of your driving record; it is not always correct. If you’ve gotten a ticket for which your penalty was traffic school, your participation may not be reflected. To that end, keep all receipts for paid tickets and traffic school until your license renews. 3. Understand that your deductible and your premiums are inversely related. By keeping a higher deductible, your premiums are lower, and you can use the difference between a low premium and the higher premium, and stash it away, in the event you might need it some day for your deductible. While you might be tempted to keep a low deductible so that you can file a claim for fender benders, each and every claim raises the likelihood that your future premiums will increase. 4. Be honest about your driving history. The insurance companies can and do verify this with the state department of motor vehicles; if you omit something, they can deny your application or reclassify you as a high risk applicant. 5. Don’t buy the same coverage for different cars. An older car may not need collision or comprehensive coverage; the rule of thumb is if the value of your car is less than ten times the premium cost, it’s not worth the price of the policy. Also, collectible cars will likely require a specialized policy, such as classic car insurance. 6. Don’t assume the state’s minimum requirement is sufficient. If you get into an accident that surpasses the limitation, it has to be paid somehow, and that will be through you or your assets. Consider how much damage your car could cause, if an accident occurred; typically, the bigger the car, the more significant the damage potential. Likewise, because of the skyrocketing costs of medical procedures, even a short stay in the hospital could wipe out your entire limitation; many experts suggest having at least $500,000 of liability coverage. 7. Consider opening an umbrella. Policy, that is. An umbrella policy is relatively inexpensive, and can protect you and your assets in the event of a “catastrophic” accident, that goes way beyond your coverage limitations. When you’re ready to buy your car insurance, keep these in mind, and you’ll be on your way to getting the affordable car insurance with all the coverage you need. 12 Factors that Affect Your Car Insurance Rate A number of factors can influence your car insurance rate. These factors all relate at least indirectly to the amount of risk that the insurance agency must undergo. At a minimum, the buyer should be aware of the following factors when shopping for the best price on car insurance: Where You Live Your physical location can affect your car insurance rate. Rates are typically higher in large cities that have a high traffic volume and, hence, higher collisions. What You Drive Statistics have shown that certain automobile types (and, indeed, certain automobile colors) are more likely to be involved in accidents than other vehicles. Insurance companies use these statistics and set higher rates for vehicles that are statistically more likely to be involved in a collision. How Much You Drive Someone who uses their vehicle for only daily errands is less likely to be involved in an accident than someone who uses their vehicle for long daily commutes, frequent weekend trips, and other extended road outings. Companies use how much you drive as yet another factor when setting your car insurance rate. Your Driver’s Record Clearly, someone who has a history of poor driving with many speeding tickets and other moving violations represents an increased risk for an automobile insurance company. Amount of Coverage You Carry You get what you pay for in auto insurance. Policies that cover every kind of damage conceivable are obviously going to carry a higher car insurance rate than the minimum legally required policy. Your Insurance Company Different Insurance companies have different comfort levels when it comes to the types of coverages they offer and the kinds of drivers they are willing to ensure. Your Age Insurance companies follow the statistics, and statistics show that young drivers are more likely to be involved in an accident than older drivers. Therefore, most auto insurance policies provide favorable rates to mature drivers. Your Credit History This is a fairly new auto insurance rate factor, and many people question the relevance of the credit score in regards to the insurability of an individual. However, many insurance companies feel that those with bad credit are more likely to file a false claim than those with good credit. Whether this is accurate or not is open to debate, but the fact is that more and more companies are using credit history as a factor in determining insurance rate. Your Gender Yes, in this age of gender equality, gender is still considered to be a relevant factor in determining your auto insurance rate. Typically this distinction only applies to young drivers (under the age of twenty five) because statistics show that young males tend to be more aggressive and therefore more likely to be involved in a car accident than young females. However, before you consider gender realignment surgery to improve your car insurance rate, remember that this discrepancy disappears after the driver reaches the age of twenty five. Your Marital Status Married drivers tend to receive advantageous rates from insurers. Of course, the difference is not enough to make getting married for better car insurance rates a common practice. Accident Claims You Filed in the Past Someone who has filed many accident claims in the past is considered to be a greater risk than someone who has not and therefore is likely to receive a higher rate. Special Discounts Always be on the lookout for specials discounts on insurance that may be offered through your employer, through clubs or organizations you are associated with, and any other avenue.