5 Auto Insurance Secrets You Didn’t Know

Auto insurance can be complicated, and you should know as much as possible before purchasing it. Doing your research can come in handy if you are shopping around for a new auto insurance provider. Here, we’ve listed a few auto insurance secrets that can help you get the best deal.

Rates Are Impacted by Credit

One insurance-related use of credit data is determining how risky an applicant is. Insurance companies may use credit-based insurance scores with other variables to estimate the likelihood of an individual to submit a claim. A high credit score can help you secure a low premium.

Brand Loyalty May Prove Costly

Insurance companies have been using more variables to determine auto insurance premiums in recent years. Given this, consumers now have more options when shopping for the best rates. As a result, your mindset about setting and forgetting your auto policy may not be good to continue. Comparison shop once a year to ensure that you are getting the lowest car insurance prices.

Don’t Stop Your Premiums

If you think canceling your car insurance by simply stopping payments are a good idea, think again. You’ll likely face damage to your credit score, as your existing insurance provider will report you for nonpayment. Also, your history with that company could result in a worse premium situation with any new insurance provider down the line.

The Insurer Can Call the Shots

Your auto insurance company may cancel coverage or refuse to renew your policy if you violate one or more of its guidelines during the policy period. For example, you may be asked to provide proof that you have not lost your driver’s license due to suspension or revocation. Or if you submit too many at-fault claims or misrepresent your driving history or past insurance claims, the company may decide to cancel your policy.

Pay Premiums in Full

If you choose to pay your auto insurance premiums in installments over months, you will incur “convenience fees” that could make your car insurance much more expensive. Every month-to-month, six-month, and three-month installment payment incurs an administrative fee. Depending upon the installment payment method—automatic bill pay or pay by phone—you may incur additional charges.