What affects the price of your auto insurance?

Did you know that only 12% of people in the United States feel comfortable comparing automotive insurance online? 

That makes a lot of sense to us because there are so many different factors to consider in choosing the best, most effective, and most appropriate insurance for each driver. In our experience, you won’t find out what coverage you have until the time of an accident. We want to make sure that you have the best possible coverage to take care of you when you really need it.

You should feel comfortable knowing that you’ve chosen the best auto insurance plan for you, so we’ve made an outline of price-effecting factors and how to navigate them below. They are listed in order, with the easiest-to-change factors at the top.

If you don’t already have auto insurance with us, we are available to help walk you through the steps to choosing the best and most cost-effective plan Monday through Friday, 8:30am-5:30pm. And the best part: we’re paid as account managers by the insurance company, so most of the time you don’t have to pay a dime for our 25+ years of expertise!

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The Type of Coverage You Choose

How to save: Carefully evaluate whether different types of coverage make sense for your individual situation. For instance, you don’t need personal injury protection if you have adequate health insurance, and you definitely don’t need roadside assistance if you have AAA.

Then again, roadside assistance may be less expensive through your auto insurance company rather than than AAA.

If you’re financing or leasing a car you’ll be required to have comprehensive (covers damage to your vehicle that don’t involve crashes) and collision (for crash-related damage to your vehicle). If you own your vehicle, it might make sense to drop this pricey coverage if you drive very infrequently or if your car’s value is very low.

The Amount of Coverage You Choose

How to save: You don’t want to overpay for coverage you don’t need, but you also don’t want to be on the line for thousands or even hundreds-of-thousands of dollars should an accident happen.

In California we are required, as drivers, to carry at least $15,000 per person/ $30,000 per accident of to cover bodily injury, and at least $5,000 to cover property damage.

But you probably don’t want to carry only the minimum. The reality is that accidents can cost much more than that, and you want to make sure that someone other than you is on the line to pay for them, or you could lose all of your assets.

Experts often recommend $100,000 per person and $300,000 per accident as a minimum.

Instead of choosing less coverage, consider increasing your deductible (the amount you pay when filing a claim) so that you pay up to $1000 in case of an accident. This can make a big difference in the cost of your insurance.

Your Driving Habits

How to save: The less you drive, the less chance you have of getting into an accident. This means you’re considered less of a risk, and you pay less. Carpooling, public transit, and fewer road trips can all effect how much you drive. Make sure to report any changes to your agent so you can enjoy the savings!

Your Credit Score

How to save: Please note that in California, this applies only to commercial auto insurance.  When insuring a commercial vehicle, commercial auto insurance companies often check your credit score as a measure of responsibility. Raising your credit score is enormously worthwhile because it is a huge money-saver all around, including in your commercial auto insurance prices.

The Car You Drive

How to save: This becomes most relevant when your choosing what kind of car to drive. General guideline: the faster it goes, the riskier it is, the more you’ll pay. Most of the time, a used car will be cheaper to insure than a new one.

But if you are going to buy a new one, anti-theft devices and safety-focused equipment can save you money on auto insurance.

There are other factors that affect the cost of your insurance like your driving history and your basic demographics (age, gender, zip code, etc.), but those factors are a bit harder to change so we won’t go into detail about them.

A good rule of thumb for those factors is:

  • Drive carefully
  • Park your car in a garage
  • Live in a safe, low-traffic area

We hope you found this outline helpful, and that it will change the way you look for auto insurance for years to come.

Of course, please don’t hesitate to contact us if you’d like help determining the best way to insure your vehicles and with your budget in mind.

Your friends at the Point

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