If you own and drive a car you must have car insurance to be legally compliant. For most people, once they have their car insurance policy in place, they just pay their premiums and go on about their business. But since car insurance is so important, it makes sense to know a little more about what can affect your car insurance. Here are some facts about car insurance that many people aren’t aware of.
Most people aren’t aware that your credit can affect how much you pay for car insurance. Insurance providers have found that certain credit characteristics for an individual are useful to predict how likely it is that the individual will have an insurance claim. As a general best practice, do what you can to improve your credit, be sure to monitor your credit report on a regular basis, and contact the credit bureau to clear up any errors.
People don’t realize that most car insurance companies charge an administrative fee to break up your premium payments into installments, such as paying every six months, every three months or every month. You may be able to save a significant amount of money by paying your entire yearly insurance bill up front. Be sure to ask your provider what its administrative fees are. If it makes financial sense and you can swing it, pay your premium up front and in full. Not only will you avoid the added expense, you won’t have to worry about missing a payment, or being late on payments, both of which could be grounds for cancellation.
If you’ve grown comfortable with your insurance company and are happy with just paying the premiums year after year, you may be losing money. Today, insurance companies use a variety of criteria to assess insurance rates and they can differ from one company to the next. Comparison shopping for a better deal once a year could save you significant money.