Did your auto insurance premium just go through the roof? It’s not hard to figure out that taking a safe driving course or adding security features to your car can potentially lower your rates, but what pushes them up? Learning what pitfalls will cause your insurance rates to go up will help you avoid them.The Payment Plan
Insure.com points out that opting for a monthly payment plan increases the cost of your insurance, because you pay more for processing fees. For example, a provider might tack on an extra 23.50 to process the payment each time. If the insurance costs 800 dollars a year that means you pay an additional 282 dollars just to make monthly payments.
The alternative is to pay the full policy in just one or two payments a year. If you reduce the number of payments, you only pay the processing fee once or twice instead of 12 times.
Create a budget that will allow you to save a little bit each month to go towards your next policy. For example, if your insurance runs 400 every six months, put aside 67 dollars a month for the renewal. This allows you to pay off the policy and avoid the payment plan fees.Certificate of Financial Responsibility
The need for an SR22 or FR44 filing is a problem that can affect your premium rate. The Texas Department of Public Safety explains that an SR22 filing is a certificate the provider sends to the state confirming you have the proper insurance coverage.
The state courts decide when a driver must provide a Financial Responsibility Insurance Certificate like an SR22 or FR44. The reasons vary by state but usually include:
Driving under the influence
License suspension
At-fault accident without insurance
Excessive traffic violations
The need for an SR22 filing puts you in the high risk category for most providers, and that means your insurance rates will go up.Changes to Your Driving Record
Obviously, changes to your driving record can affect your insurance rate, but some issues have a bigger impact. MSN Money states one study showed certain tickets raise your rate by a fixed percentage. The more expensive ones include:
Reckless driving – 22 percent increase
Driving without a license – 18 percent
Careless driving – 16 percent
Failure to stop – 15 percent
Even a seat belt infraction will cost you three percent.Life Changes
Rates go down as you get older, but other changes in your life can make them go back up. Getting a new job, for example, will raise your rates if you drive further to work each day.
Buying a new car may increase your rate, too. Older cars cost less to insure, according to CarInsurance.com. If you take out a loan for the new car, you may need more extensive insurance, as well, and that drives up the premium rate.
Getting married will lower your insurance, so getting divorced will have the opposite effect. Insurance companies see a married person as more stable.
Moving to a new home can go either way. Insurance is higher in some areas than others. Small towns are less expensive than larger cities with lots of traffic. Rates vary by state, as well. If you are buying a home, however, that can have a positive effect. Owning a home improves your risk rating and may lower your auto insurance.
Insurance rates fluctuate naturally, so some variance is normal. If your insurance takes a big jump, however, you need to know why and what you can do to make it affordable again. If you buy a home, ask your agent about a getting all your insurance from one company to lower your premium.
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Sunday, July 3, 2016
