How Premiums Are Calculated
Every insurance company has its own formula for calculating premiums. But they all use factors like the make and model of your car, how you use the car, your driving record, your age, gender, marital status, where you live, and your credit score.
The Difference Between Collision And Comprehensive Insurance
Comprehensive insurance provides protection against theft and damage by any incident other than an accident like a fire, flood, vandalism, hail, falling trees or rocks, or an animal impact. Collision insurance reimburses you for any damage your car suffers as a result of a collision with another vehicle or object when you’re at fault. It will also cover any damage from potholes or rolling your car.
Expensive Cars Don’t Always Mean Expensive Insurance
Always check how much it costs to insure the car you’re interested in before you buy it. An expensive SUV can have better claim rates for accidents or thefts than a lower-priced car that gets stolen often. So the SUVs premiums can be lower.
You Can Pay Less For The Same Coverage
Increasing your deductible can reduce your collision and comprehensive insurance premium by up to 40 percent. Insurance companies also offer discounts for low-mileage, multiple cars, safe drivers, students with good grades, etc.
Personal Auto Insurance Doesn’t Cover Using Any Business Uses
If you use your personal vehicle for any side-business like pizza delivery, messenger, or ride-share driver, your policy could be canceled. Check with your insurance company about getting an endorsement to your policy for that business related driving.
Your Insurance Will Pay if Someone Else Has An Accident While Driving Your Car
Remember that auto insurance always follows the vehicle and not the driver. If you lend someone your car, you also lend them your insurance. Remember this whenever someone borrows your car. Unless it’s an emergency or if you’ve been drinking.
Letting Your Insurance Lapse Can Drive Up Your Rate
If you plan on not driving for a long time, you may consider canceling your car insurance. Or sometimes, you may just forget to pay your premium. Whatever the reason, whenever you decide to renew, you can expect your premiums to be much more expensive. Insurance companies consider any lapse to be risky and penalize you for it.