When I got my kids a dog, I had no idea that it could affect my homeowners insurance. I happened to run into my insurance agent in the store when I was buying dog food and he asked me what kind of dog we had. When I told him, he said I should stop in the office the next day. I had no idea that things like this could affect premiums, so I started asking what else could do it as well. I created this site to help others understand some of the finer points of homeowners insurance and what they should think about to manage their rates.
Buying and keeping an active auto insurance policy isn't just a good idea — it's a legally mandatory part of life. Even if you wish to save money each month on your premium payments by skipping the comprehensive portions of an auto policy, you're still legally required to purchase a liability policy. Since a bare-bones liability policy is mandatory, you're probably looking for ways to save money on this fixed monthly expense. But here's something you might not have thought of: Just because you're required to hold, at minimum, an enforced liability policy, doesn't mean that you can't achieve any flexibility on how much you pay every month. In other words, you're required to pay for this expense, but the amount of money you're required to pay isn't mandatory. That's good news if you care about getting the best return on your monthly premium investment.
Here's a handful of factors that could be raising your monthly premiums. Consider these while you're shopping for auto insurance.
What type of driver are you?
It goes without saying that your driving habits and your public driving record are going to play a huge role in what type of premiums you can expect to pay each month. Safer drivers get better (lower) rates because they're less of a risk to insure. If you've racked up lots of speeding tickets, then you're a higher risk. Keep in mind that younger drivers (typically 25 years and younger) are perceived to be higher-risk drivers, so they'll automatically pay more on their premiums. The older the driver, the more stable and mature they're perceived to be, especially if they're parents.
What type of perks are being offered?
An insurance carrier will try to entice you with perks such as free roadside assistance, product discounts, and more. The cost of perks gets passed on to you via your monthly premiums. Specifically, your carriers will charge more money for the insurance policies they issue. Although higher policy costs are very incremental, you're the one who is sponsoring these hidden costs.
How financially solvent is your insurance carrier?
While all insurance carriers are licensed by their home states to pay for insurance claims, not all insurance carriers are equally solvent or profitable. Big national carriers are wealthy, so paying out claims doesn't hurt their bottom line as much as it would for a regional carrier. If a regional carrier finds that it's paying out more claims than it's generating revenue, then it will be forced to raise the cost of its auto insurance plans. This equates to higher costing premiums per month.
If you're looking for a new auto insurance policy on a new car, or if you're simply shopping for the best policy for your money, then be sure to examine what a prospective policy offers and requires, so that you can make the most financially educated decision for your budget.
Share5 April 2021
