5 important facts about car insurance no one ever tells you
Now, if you’re wondering how you can save on auto insurance, there’s something you should know.
Fact No. 1: Your credit may actually impact your insurance rates
Believe it or not, your credit may impact your insurance rates. Insurance providers have found that certain credit characteristics for an individual are useful to predict of how likely it is that the individual will have an insurance claim.
Fact No. 2: Brand loyalty can cost you
If your mind-set about automobile insurance is “set it and forget it,” you might want to reconsider. Years ago, insurance companies evaluated a short list of factors when calculating your premiums. Today, that list has grown to a confusing labyrinth of criteria causing insurance rates to differ dramatically from provider to provider. Sticking to one company or brand can actually cost you long-term.
Fact No. 3: Planning to stop payment? You may pay in the long run
If you think switching car insurance companies is as easy as stopping payment, think again. Sure, your policy will cancel, but your existing insurance company could report you to the credit bureaus for nonpayment, damaging your credit score in the process. What’s more, your insurance history will reflect a cancellation which may cause a new provider to decline your application or charge you higher premiums in the future.
Fact No. 4: Your car insurance company can cancel or non-renew at any time
Your insurance company can cancel your policy at any time if you violate one or more of its guidelines during your policy period. Same goes for nonrenewal. Things such as failing to pay your premium on time, losing your driver’s license due to suspension or revocation, submitting too many at-fault claims, or misrepresenting your driving history or past insurance claims could all be reasons for cancellation or nonrenewal.
Fact No. 5: You could save money by paying your car insurance premium in full
You might be surprised to learn most car insurance companies charge an administrative fee to break up your premium payments into installments, such as paying every six months, every three months or every month. The more you split up your payments in installments, the more these “convenience fees” add up, and your once-cheap car insurance can now cost substantially more. There may also be charges for the method of installment payment you choose, such as automatic bill pay or pay-by-phone.
