Car ownership is the ultimate ticket to independence as an adult, but there are some aspects of it that can leave you feeling less than enthused.
Insurance is certainly a sticking point, because it’s required virtually everywhere, and might even be a prohibitive cost if you don’t have much cash to put towards motoring.
If you’re in this situation, or you’re just interested in the ins and outs of how car insurance works, read on for a rundown of the points to take onboard.
Insurance costs can vary wildly so you need to shop around
If you aren’t shopping around for inexpensive auto insurance then you could be overpaying by hundreds or even thousands of dollars when you renew your policy.
There’s plenty of competition in this market, and lots of insurers out there who will want to give you a better quote than their rivals in order to win you over as a customer. However, unless you actually compare the packages on offer, you could be stuck with a deal that doesn’t represent good value.
Credit score comes into play when car insurance prices are calculated
When you take out car insurance, your provider will run a credit check to see how your history stacks up, and could end up charging you more for cover if you don’t have a blemish-free report under your belt.
Because of this, it’s sensible to check your credit score before applying for car insurance and seeing if there’s any changes you can make to improve it if necessary.
Paying down your debts and making regular repayments on any credit cards you have to your name are two of the best ways to boost your score. Simply having an awareness of this aspect of your financial health will set you on the path to enhancing it.
Car insurance relates to the vehicle rather than its driver
It might sound obvious, but your car insurance package will usually be specific to your vehicle, and so will apply no matter who is behind the wheel.
In theory, this means that lending your car to a friend is a possibility that won’t require you to sacrifice any cover as a result. However, it also means that your insurance will pay out if someone else gets in an accident while driving your car, and you’ll need to bear the brunt of the increased premium costs that will often come after such an incident.
Each state has its own insurance rules
Part of the reason that insurance costs are so different is that a lot of this depends on where you live and where you’ll be doing most of your driving.
Here are some of the most common factors that affect insurance rates:
- Accident history. Some states have higher premiums because of their car accident statistics. If your state has a high incidence of auto accidents, then your car insurance company will charge more to insure your vehicle. If you have been involved in a car accident, make sure to look for an accident attorney near me. They will negotiate on your behalf regarding your insurance claims.
- Crime rate. Your car insurance company may increase your premium if you live in an area with a high crime rate. This is because there’s a greater chance that someone will break into or steal your vehicle or cause damage to it while it’s not being properly secured.
- Weather conditions. Severe weather can create hazardous driving conditions and make roads more dangerous. Drivers often have accidents when they’re traveling during severe storms or snowstorms because they’re distracted by the weather conditions around them instead of paying attention to what’s happening on the road ahead of them. If you live in an area with frequent severe weather events, you may pay higher premiums than drivers who live in areas where these events aren’t as common or severe as they are where you live now (and vice versa).
Aspects like the climate, as well as driving stats specific to a given state, can leave some car owners paying much more just because of their place of residence.
Also remember that if you move to another state, you’ll probably need to get a new insurance deal to reflect this. Any delays might leave you without cover, which in turn could expose you to the full liability of any accident or incident on the roads.
Vehicle value is less relevant than you’d think
Finally, don’t assume that driving an older car will net you savings on insurance because you could find that quotes for a newer vehicle will be cheaper in spite of its book price.
Insurers are more interested in the stats behind the types of people who pick particular styles of car, and the accident stats that go along with this. So older, customized vehicles may be more heavily depreciated and thus cheaper to buy, but newer family vehicles will be cheaper to insure.