According to auto insurance experts, the poor economy is not a good reason to skimp on insurance. On the contrary, they argue, Americans should pay more for insurance now more than ever. Recent studies suggest that with unemployment figures still high, more and more car owners are choosing to drop their coverage. As a result, the likelihood of getting in an accident with uninsured drivers has increased significantly. Eventually, insurance providers have to raise premiums to better protect policyholders from underinsured and uninsured motorists.
However, there are several options that motorists can consider to save money without letting go of their insurance coverage. For instance, drivers can start by buying a car that is relatively cheaper to insure. Generally speaking, vehicles that are larger, faster, and more expensive, cost more to insure. The extra horsepower under the hood can mean higher premiums because insurers would assume that the policyholder would make good use of the car’s power. This means that there is a possibility that a motorist with a sports car can get in an accident.
Insurance providers also slap higher rates on large vehicles like commercial and passenger trucks, and SUVs. Because of the added mass, there is a higher chance for physical injury in the event of an accident. Some safety studies also suggest that certain SUV models are prone to tipping over if they go out of control during high speeds.
Experts also say that drivers have to do their homework and look for vehicles with high safety ratings. Insurance companies rely on safety standards and findings to determine premiums. Having a relatively safer car can be a crucial factor in getting cheaper insurance.
For motorists who drive older vehicles, experts suggest doing away with additional coverage. They point out that in most cases, it can be less costly to pay for repairs with money from the car owner’s own pockets. Policyholders can drop collision and comprehensive coverage especially if their vehicle’s value is below $3,000. Drivers can also increase their deductibles to as much as $1,000 to get up to 30 percent slashed from their premiums.
In some states, insurance officials allow providers to base premiums partly on the car owners’ credit ratings. Having a good credit history and sound financial status can go a long way in proving to insurance providers that a policyholder is more than capable of paying for insurance on time. Credit ratings also give insurers an idea of how responsible a particular motorist can be.