Sometimes, we’re our own worst enemies. This is certainly true when it comes to car insurance. Everybody wants to pay as little as possible while enjoying the coverages they need. The problem is, many drivers sabotage their own efforts. How? By doing things that tell their insurers they pose a serious risk. The higher the risk the pose, the higher their rates. Below, we’ll describe several mistakes you’ll want to avoid making if you care about your premiums. Each one will cause them to rise.
A lot of vehicles have a history of frequent and expensive claims. The reasons vary. For example, some cars are stolen more often than others. Some offer little protection for passengers, who suffer injuries during accidents. The claims history of every vehicle is tracked by make, model, and year. Each one then receives a score. Insurers use these scores to assess the risk of future claims associated with the respective vehicles. If you buy the wrong one, you might end up paying higher rates.
This should not come as a surprise. If you are convicted of driving under the influence, your insurance company will dramatically raise your premiums (or, they may simply cancel your policy). The level of risk attached to drunk drivers is enormous since they are more likely to cause collisions that result in extensive property damage and injuries.
Any type of traffic violation has the potential to boost your rates. But some violations are more serious than others, and likely to get your insurance company’s attention. Examples include speeding, driving distracted, and running a red light. You’re not legally obligated to tell your insurance company that you received a ticket. But it won’t remain a secret for long. Most traffic violations are placed on your driving record, which your insurer checks on a regular basis. Cause A Collision (With Or Without Another Driver)Causing an accident will definitely cause your premiums to rise.
In some cases, drivers watch their rates double, or even triple, following a collision. If your insurance company offers a feature called accident forgiveness, it may be willing to “protect” your rates from a major increase. But this feature, when it is offered, is usually reserved for those with a spotless driving record. Your best bet? Drive safely.
There are a lot of ways to enhance your vehicle with aftermarket parts. Some upgrades are primarily for aesthetics, such as a rear spoiler, quality rims, or string of neon lights around the frame. Other enhancements are designed to provide a boost in performance. These include a turbocharger, modified exhaust header, or a high-performance computer chip. Certain modifications can be very costly to repair or replace. If the upgrades on your vehicle cost more than $1,000 (collectively), expect your insurer to raise your premiums. Doing so compensates it for the added risk of covering the aftermarket parts.
Accident benefits, third-party liability, and uninsured/underinsured motorist coverages are required in most provinces and territories. The only aspect about them you are able to control is the amount you purchase (above a certain floor). Most other coverages are optional. A lot of drivers choose to carry collision and comprehensive coverages. Both can be valuable in certain circumstances, but both are also very expensive. If you have an older car with a low replacement value, it may be a good idea to drop them. Submit Numerous Small ClaimsSome people submit a string of relatively small claims in order to take advantage of their coverages. This is often the case with those who carry low deductibles. Many car insurance companies will respond by raising these policyholders’ premiums. Resist the temptation to submit small, unnecessary claims. They might allow you to save money in the short run, but you’ll pay more over the long run through higher premiums.
You probably realize that rates vary between companies. Sometimes, the margin between two competing quotes is substantial. But are you actively comparing quotes from other insurers to the rates you’re currently paying? Most people renew their policies each year without shopping around for a better price. As a result, they usually pay more than necessary for their coverages. Don’t make this same mistake. Take the time to compare quotes at least once a year. If you’re trying to keep your rates low, make sure you’re not inadvertently sabotaging your own efforts. Although it may seem otherwise, you have a lot of control over how much you pay for car insurance.
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