Facts About Insurance- 6 Factors that Affect Your Car Insurance Rates

Understanding the basics of car insurance can be difficult and seem frustrating when looking for car insurance.

Below, we have outlined important facts about insurance that will help you have a better understanding of insurance and how it works.

Facts About Insurance Fact 1: Rating Factors

Insurance premiums are calculated using rating factors. These factors include marital status, age/gender, and location.

For example, if you look at the snapshot above of an actual monthly premium for a male driver using Progressive, they are paying a noticeable amount more than a female driver.

Statistics also show that married people get in less accidents and/or cause less property damage in the event of an accident.

Younger drivers cost more to insure because they are considered higher risk, usually the possibility of getting into an accident is greater than someone with more driving experience.

Facts About Insurance Fact 2: Credit Scores Impact Your Insurance Premiums

Credit plays an important role in insurance, just like it does when making a big purchase like buying a home or financing a car.

Insurance companies look at credit to determine what type of risk you are; low, or high risk.

A customer with excellent credit has a history of making payments on time, and will receive a cheaper insurance rate.

Facts About Insurance Fact 3: Cancelling Your Insurance Will Cost You

Whether you own a vehicle or not, you should keep your auto insurance active.

If you sell your car, or no longer need insurance on that vehicle, consider switching your policy to a Non Owners, Or Broad Form policy.

This way you will not lose a huge discount for having continuous insurance when you need to purchase a new policy.

You can get different types of insurance policies to reduce the cost if you have sold your vehicle, until you buy a new one.

Facts About Insurance Fact 4: Insurance Prices Vary Upon Companies

Car Insurance companies specialize in different things, whether it be SR22 Insurance, high risk drivers, vintage/foreign vehicles, etc. Companies like Progressive, while premiums are higher for high risk drivers, might have better deals.

However, some companies will decline coverage for that same customer because they are a greater risk.

A lot of companies will not offer coverage for a customer with an excessive amount of points, or may not offer coverage for foreign vehicles, like the BMW.

Facts About Insurance Fact 5: Insurance Discounts Will Save You Money

Many companies offer discounts, like continuous insurance discounts, bundling discounts, Accident Free discounts, safe driver discounts, and Paid In Full Discounts.

Check with your insurance provider to see what types of discounts they offer.

Facts About Insurance Fact 6: Coverages Affect Your Premium

Insurance premiums will vary depending upon the types of coverages you have.

You can choose to only carry liability insurance, which is the bare minimum requirements.

You can customize your policy by adding on additional coverages like Uninsured Motorist or Medical Payments.

Aside from liability, you can choose to carry full coverage which covers the vehicle in the event of an accident. Adjusting your deductibles will impact the rate, as well as extras like Rental Reimbursement and Roadside.

Why Insurance Is Important?

Understanding Facts About Insurance and why insurance is important is vital for protecting yourself and your assets. Insurance provides financial security and peace of mind by mitigating risks associated with unforeseen events. Here are a few key reasons why insurance is essential:

• Financial Protection: Insurance helps cover the costs of unexpected events such as accidents, illnesses, or natural disasters, preventing you from facing significant financial losses.
• Legal Requirements: Certain types of insurance, such as auto insurance, are mandatory by law in most states to drive legally on the road.
• Asset Protection: Insurance safeguards your assets, including your home, vehicle, and personal belongings, ensuring you can recover financially if they are damaged, stolen, or destroyed.

By investing in insurance coverage tailored to your needs, you can protect yourself and your loved ones from financial hardships that may arise from unforeseen circumstances.

Key Reasons Why Insurance is Important:

• Financial Security: Protects against unexpected expenses.
• Legal Compliance: Ensures compliance with legal requirements.
• Asset Protection: Safeguards your valuable assets.

• Multi-Policy Discount: Bundling your home and auto insurance can save you money. Many insurance companies offer discounts when you combine multiple policies. Text Us to learn more.
• Safe Driver Discount: Maintaining a clean driving record with no recent accidents or violations could make you eligible for a safe driver discount on your auto insurance. Call us at 1.888.445.2793 to check your eligibility.
• Good Credit Score: A higher credit score can result in lower insurance premiums. Some insurance companies offer discounts based on your credit rating, making it important to keep your score in good standing. Text Us for more details.
• Claims-Free Discount: If you have not filed any claims in a certain period, you may qualify for a claims-free discount, which can reduce your monthly insurance rates. Call us at 1.888.445.2793 to check if you’re eligible.
• Home Safety Devices: Installing home safety features such as smoke detectors, burglar alarms, and sprinkler systems may make you eligible for discounts on your homeowners insurance. Text Us to learn more about safety-related discounts.
• Low Mileage Discount: Driving fewer miles each month can qualify you for a low mileage discount on your auto insurance, potentially lowering your rates. Call us at 1.888.445.2793 to see if this applies to your vehicle insurance.
• Military or Affiliation Discount: Many insurance companies offer discounts to military personnel, veterans, and members of certain organizations. Text Us to inquire about eligibility for this discount.
• New Home Discount: If your home was recently built or renovated, some insurance companies offer discounts for newer homes. Call us at 1.888.445.2793 for more information.
• Vehicle Safety Features: Vehicles with advanced safety features like anti-lock brakes, airbags, or anti-theft systems may qualify for discounts on auto insurance. Text Us to find out if your vehicle qualifies.
• Early Renewal Discount: Renewing your policy before the expiration date can sometimes earn you an early renewal discount, reducing your premium for the next policy term. Call us at 1.888.445.2793 for guidance.

What Are The 3 Most Important Insurance?

When delving into Facts About Insurance, it’s essential to understand the three most important types of insurance that can safeguard your financial well-being and protect your assets. These include:

1. Auto Insurance: Protects you financially in case of accidents, theft, or damage to your vehicle. It’s mandatory in most states and typically includes liability, collision, and comprehensive coverage options.
2. Homeowners Insurance: Provides coverage for your home and personal belongings against damages caused by perils such as fire, theft, or natural disasters. It also includes liability protection in case someone is injured on your property.
3. Health Insurance: Offers financial protection against medical expenses, including doctor visits, hospitalization, and prescription medications. Health insurance helps ensure you have access to necessary healthcare services without facing significant financial burden.

By having these three essential types of insurance coverage, you can mitigate risks and protect yourself and your loved ones from unexpected financial hardships.

Key Insurance Types for Comprehensive Coverage:

• Auto Insurance: Protects your vehicle and offers liability coverage.
• Homeowners Insurance: Safeguards your home and personal belongings.
• Health Insurance: Provides financial protection for medical expenses.

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Last Updated on November 29, 2024 by Marlon Moss