How Auto Insurance Companies Are Keeping Secrets


It is not only our friends that keep secrets from us, but your auto insurance provider may be doing so as well. Some of these secrets are just plain and simple, while others will shock you.

While most of the auto insurance information you get on the Internet has some truth to it, uncovering this important information could not only help you save money but also assist you in averting from the insurance traps.

Get A Good Credit To Lower Your Premium Rates. You could say that this is no longer a secret but still a lot of people do not figure out that their credit score affects their insurance rates. Statistically, insurance companies believed that a person having a good credit score is less likely to be in an accident, hence, rare in filing insurance claims. As a reward, your insurer could extend price discounts in response to the lesser risk. Having said that, if you want lower rates, try increasing your credit score.

Your Vehicle Affects The Rates. Another factor that most people have failed to realize is that the type of vehicle that they are insuring is one of the factors that determine the premium. Basically, your vehicle is rated in a scale of 1 to 27. The higher the number, say 25, the greater the risk and higher insurance premiums would be. This particular vehicle scaling may not be made known to anybody but it is relatively easy to tell by determining the value of the car, the safety ratings, and theft data.

Method of Payment. If you want to save money, you may choose to pay a lump sum instead of monthly installments. It is also wise to use alternative payment methods offered by your insurer such as an online payment facility, automatic credit card deductions, and other payment methods. Contact your insurance agent and ask if using one of these options will entitle you for some discounts.

Determine What Is Being Covered. Again, talk to your insurance provider to understand the specifics on what is covered by your policy. Some insurance providers will even cover your pet as long as he is inside during the accident, but will refuse to cover vandalism, theft, or the “acts of God” accidents.

When Accidents Become Expensive. Certain accidents will make your premium prices surge high. For instance, if you are the at fault driver of an accident, expect an increase of about 40% of your current price depending on the insurance provider.

Lending Your Car. Most insurance companies will not allow you to lend your car to another person unless he is specifically included in the auto insurance policy. If you must do this, be sure to get a rider policy to cover him. 

The Value of Your Car. Most insurance companies offering cheap auto insurance coverage devalue your car to arrive at a reasonable rate. You will not be able to experience the pain unless your car is wrecked totally; the amount might not be able to replace your vehicle, you could end up as a loser.

Insurance Cancellation Must Be Made Official. If you are planning to switch insurer for personal reasons, you are required to put that in writing and to notify your previous insurer the exact date when the policy will terminate. You may also be required to provide proof of insurance to start the process.