The cost of car insurance is not calculated simply or consistently within the industry. Different companies use different formulas and risk factors in order to arrive at a final figure. There are also regional differences that determine how much certain car models, safety features or driving incidents matter. Drivers who want to pay less for insurance can take a few simple steps that will lower rates regardless of the provider.
Defensive Driving Classes
Defensive driving classes provide information about how to remain safe while on the road. Drivers learn driving techniques that proactively avoid dangerous situations. Participants also learn how to protect the other drivers on the road so that a simple problem or accident does not become a multicar pileup. Insurance companies charge drivers who have completed a defensive driving class less because it reduces the risk of an accident on the road.
Good Driving Record
The driving record of an individual helps to determine the cost of the premiums. A consistently poor driving record will result in higher rates. One way to lower rates is to practice good driving habits. Avoiding accidents or other incidents for several consecutive years will lower premiums. These drivers are seen as being very low risk. Some insurers even offer programs that automatically reduce premiums or deductibles each year for drivers who maintain a good driving record.
One way to lower car insurance premiums is to request higher deductibles. A higher deductible means that there will be larger out-of-pocket costs for the driver in the event of an accident. It also means that the insurance company will pay less. This translates into lower premiums because of the reduced cost of dealing with damage to a car or personal injuries. This option is best for individuals who will not be driving much. Increasing deductibles should be considered carefully since a single accident could cost thousands of dollars before the insurance coverage starts.
There could be vast differences in the cost of car insurance depending on the company. It is best to shop around and compare quotes throughout the year. Some insurers will offer equivalent coverage for a lower price. This makes it possible to switch insurance companies when a contract ends. Shopping around also provides an accurate look at the average rates in an area. This information as well as the rates of competitors can be used to negotiate better prices with the insurer currently providing coverage. Most insurers will match competing rates in order to keep good customers.
Modern automobiles have complex computers under the hood. Many insurers are giving drivers the option of installing a small monitoring device in the vehicle. This device records information such as the distances that are traveled, average speeds and general driving habits such as sudden stops. The monitoring device gives insurers an accurate picture of the risk that a driver poses. Some also provide a log of events that can be used to determine what happened if an accident occurs. Monitoring devices lower the cost of insurance although they are not available for all vehicles.
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Larry Perkins is a London based blogger and insurance underwriter who enjoys sharing useful tips on how to lower your car insurance premiums with the world.