It can be very difficult to find the best premiums for car insurance. After all, car insurance companies do not make their methods of calculating premiums public knowledge. However, while you may not be able to figure out exactly what factors insurance companies are weighing, it is known that your credit score plays a significant factor. This is because studies have shown a connection between your likelihood of filing a claim and your credit score. Insurers figure also that someone who has had the same credit accounts for a long time, and who pays bills on time, is likely a stable person, and less of a risk for driving poorly.
Car insurance companies calculate your overall risk level by taking into account things like your driving history, your age, the type of car you own, and your credit score. There's no way to find out for sure what they rate you as, but you can look at the same things they look at and then make a reasonably good educated guess at your risk level. The first thing to do to save on your premiums is to remember these things when you're first shopping for a car or an insurance policy. By buying less flashy, subdued car models, you reduce your risk. Buying insurance only when you have a good credit rating is also a very sensible idea. You don't want to be stuck with awful premiums because of a temporary slump in your credit rating, do you?
Note: You can keep premiums down by keeping small claims down. If you've had items stolen from your car, such as a CD collection - file this on your homeowner's insurance. Bad drivers will pay more in premiums - including you if you drive badly. You can pay up to 40% more after your fist at-fault accident. This is the industry standard, although not all insurance companies follow this guideline.
If you're lucky, your insurance company may have a policy of 'forgiving' the first at fault accident. You should be aware of whether or not your company has this policy, but even if they do, don't rely on it to bail you out. It's better to not need it at all. Remember that you're still responsible for your vehicle even if a friend or relative is driving it! That means that if they get into an accident, it's as good as if you got into it yourself. So be careful about who you let borrow your car.
Each auto insurance company figures the worth of a vehicle in a different manner. All of them keep their own lists of car values (like the Blue Book list). Some companies may ask local car dealers what they'd charge for a particular vehicle. Gap insurance might be worth purchasing, as it might pay the difference between what your insurer will pay and what you actually owe. Keep any maintenance records you have, especially of oil changes and routine checks by a qualified mechanic, or special parts, or upgrades. These will be factors in figuring what gap insurance will pay.
If you get into an accident with an uninsured motorist, and he or she is at fault, then if you hold multiple car insurance policies you might try to "stack" them. "Stacking" refers to collecting from multiple policies for the same incident. Check the language of each of your insurance policies to see if they allow stacking. If you have UM/UIM coverage on more than one car insurance policy, then you can likely make claims under each until you have recovered 100% of your damages.
Note: You can wait to add your teen driver until they are licensed. While operating under a "learner's permit" your teen does not need to be on your coverage, thus saving you money. However, do NOT forget to add them as soon as they become licensed. If you delay, you'll have to pay the higher premium retroactively to the date they got their license. Note: When changing insurance carriers, be sure to cancel your previous coverage in writing. The easiest way is to give your insurance agent a call. They'll even complete the cancellation paperwork and send it to you for signature. Be sure to give the exact date your new coverage begins, so that you do not have a lapse in coverage.
Author Resource:
Susan Reynolds is the webmaster for a leading South African Insurance Provider who specialises in Car Insurance .
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