Does this sound familiar?
You've been a responsible driver for many years, but you notice an upsetting pattern; every year your car insurance premiums creep upward. What's going on? What are you doing wrong? Well, the answer may be "nothing." Remember that the cost of providing insurance, as it is with other products and services, may increase for various reasons. Factors that can affect car insurance premiums include the following:
- Your insurance company's overall loss experience (due to a higher level of claims)
- The increased value of newer model cars
- Increases in judgment amounts awarded in auto lawsuits
- Increased business processing and administrative expenses
What these items have in common is that they're out of your control...so don't worry about them. However, you do have some control over what happens with your premiums. It may be time to step back and take a fresh look at your car insurance.
How do I evaluate my situation?
A good first step is to gather your insurance records and any other car-related information. Next, determine if circumstances have changed since you last dealt with your coverage. Consider your cars or trucks, how they're now used, who are the drivers and your driving experience. Once this information is handy it's time to call your agent. What should you discuss? Well, here are some areas to consider:
- If you have your home and auto insurance with the same company, are you getting a discount?
- Does my coverage take full advantage of the discounts offered by my company?
- I have more than one car; am I getting a credit?
- How much premium can I save by changing deductibles? Determine the dollar amount of any loss that you can comfortably handle as an out-of-pocket expense.
- Do my cars really need full coverage insurance? On an older car (over six years old) you may want to drop collision and/or comprehensive coverage and carry liability coverage only. Ask your agent what makes sense. IMPORTANT: you must maintain these coverages if you're still paying off a loan on your car or truck.
- Do lifestyle choices such as drinking or smoking affect my premium?
- Does it matter that my daughter made the Dean's List? Don't think this information is bragging since your company may give discounts to young drivers with good grades.
- Did you know that my car has anti-lock brakes; airbag; theft alarm system? (Some companies provide discounts for safety and anti-theft features)
- Did you know that my son took Driver's Education?
- Does the company have accurate information on how often and how far I drive?
- Am I with a standard carrier or do I qualify for any preferred program?
- Is my vehicle charged an additional premium because of its type or performance?
- Do I get a credit for my driving/claims history or for how long I've been covered? If applicable, find out if your company rewards a loss-free history or longevity.
Communicating with your agent
The best way to discuss your insurance needs is to be open and honest with your agent. Giving your agent accurate information puts him in the best position to make certain that you get the best available premium. Carefully answer your agent's questions and provide complete details about any tickets, accidents, or violations in your driving history. This approach also applies to information about who drives your cars and how the cars are used. Finally, your agent is a terrific resource for handling errors about your account or which may be shown in your driver records. . . so use their expertise.