How can I reduce high premium rates?


Buying auto insurance cannot be avoided and so understanding various policies and how the premiums can be lowered helps a lot in saving money. There are different reasons for high premium rates and it depends on various factors related to the geographical area. Below are the top reasons for high premium rates on auto insurance:

  • Geographical area conditions influence the insurance rates too, especially if the policy holder includes a comprehensive insurance policy into the coverage. Some areas are naturally more prone to extreme weathers, storms, floods, hurricanes or even earth quakes. Insurance premiums are bound to be higher in such areas to counter the loss that insurance companies might run into.
  • Sensitive areas may also have high premium rates, since some areas have a high rate of riots and vandalisms reported. Insurance companies determine such areas as sensitive areas and charge a high premium rate since the chances of the car getting damaged are high. Even areas with high theft rates have high premium rates.
  • Model of the car is the highest determinant of the insurance premium rates. The safer the model of the car is shown to be the lower the premium rates. Insurance companies go by statistics when it comes to deciding premium rates for car models. The riskier the car is shown to be, the higher the premium rate. Also, investing in costly cars and sports cars are most likely to cost higher premium rates, since repairing these cars will be an expensive affair if anything were to happen to them.
  • Living in cities may expose the car to more damages since the number of cars in cities is higher and number of accidents is more. Also, if the car is being driven in routes that are exposed to high traffic, premium rates are slightly higher.

There are ways in which premiums can be reduced by taking some simple steps and precautions.

  • Buying an economical safe car may help reducing the premium rates by a big amount.
  • Installing safety devices and getting routine inspections done on the car also help in reducing the premium amounts.
  • Keeping the mileage per annum below the limit set by the insurance company may qualify the policy holder for special discounts.
  • Getting group insurances and upgrading the policies regularly also help in getting special discounts and special prices for the policies.

Getting all the necessary policies to make a strong coverage is important irrespective of the premium rate, since it helps in safeguarding the drivers on road.