In these tough economic times, everyone is trying to save money. Since most of us are required by our lenders to have insurance, we want to find the best value possible. The insurance industry is in a state of flux along with the rest of the financial markets so it is important that you review your coverage and your rates to make sure you are still getting what you need at an affordable price. While no one can give you insurance for free, there are some key factors that affect your insurance rate.
- Driving Record: This is a big factor in your insurance rate. If you have tickets the rates are almost guaranteed to increase when the ticket is discovered. The remedy is to avoid speeding and other things which lead to tickets but if you do get a ticket and fight it in court, make sure that the ticket will NOT appear ANYWHERE on your motor vehicle report. Sometimes the court will tell you that they are reducing your ticket to no points. Sometimes this is misleading because you are thinking they mean no points for your insurance, when, in fact, they mean no points against your driving record which affects your driver’s license privileges. The bottom line is if the ticket shows up on your record the insurance companies will charge for it even if it says zero points.
- Credit Score: There is a lot of controversy about credit scoring and many are trying to get this outlawed in Michigan. But until that court case is resolved, credit is a factor in your insurance score which determines your rates. If you have excellent credit you get substantial discounts with many insurance carriers. This is one of many reasons to work on erasing debt, paying on time and improving your credit score.
- Year, Make and Model of your car: Most people assume that the more expensive cars cost more to insure. NOT SO! Rates on car insurance are determined by rating symbols which are assigned to every vehicle. The rating symbols are based on repair and parts costs, crash testing ratings, the frequency of theft for that model and options on the car. Therefore it is quite possible that a new Cadillac will be less expensive to insure than a basic Honda! It may not make sense but if parts costs are more and that model is a car that is easy to steal, the rate will be higher even if the cost of the car is lower.
Here are some suggestions for making sure that you have the best rate:
- Get your insurance from an independent insurance agent, such as Kennedy Nemier Insurance Agency. We have over 15 different companies to shop the market for you. We strive to find you the best coverage and best rate. If you deal with an agent that only has one company, they can only offer you one rate.
- If you can afford it, get higher deductibles. Insurance companies look at claim frequency so in many cases, you do not want to report small claims. Therefore, buying a higher deductible is a good idea.
- If your car is older, consider liability coverage only. If your vehicle’s value is less than $3,000, you may want to consider eliminating comprehensive and collision coverage.
- Buy your home and auto insurance from the same insurance company. In most cases the discounts are substantial!