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Some factors that can cause your car insurance premiums to increase are beyond your control, such as your age or if you live in an area that has recently caused your insurer a significant loss of claims. But some factors that can increase auto insurance rates are just bad habits you can change.
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GOBankingRates spoke to the experts to find out how these six bad habits can cause you to pay more for car insurance premiums – and find out what you can do to turn things around and start saving money.
Bad habit #1: Choice of vehicle
“The higher the value of the vehicle, the higher your insurance premiums will be for comprehensive auto insurance,” said Melanie Musson, auto insurance expert at AutoInsurance.org. “If you wreck your car, your insurer will have to pay to have it replaced or repaired, so part of your rates are based on the value of your car.”
Musson added: “Insurance companies also look at accident statistics to determine which vehicles are most likely to be involved in an accident. You might not think the type of vehicle you drive would make a difference, but consider how you might drive a sports car differently than a van… There are statistics to back up the differences in how likely certain vehicles are to drop off. a claim, so you will pay higher premiums if your vehicle is at higher risk.
“A reliable car with good visibility goes a long way in keeping drivers safe on the road, as does the size and weight of the car,” said Holly Kilgore, insurance agent at COUNTRY Financial in Portland, Oregon. “Consider a heavier car with high safety ratings or an older sedan versus a new sporty coupe, if saving on insurance is your priority. Larger, heavier cars generally offer more protection and older cars that are paid in full give you the option to ditch collision and all risk insurance and just have liability coverage, which which reduces your insurance bill.
Bad habit #2: Paying the lowest premiums
“Paying the lowest premiums generally means you’re paying for the minimum coverage required by your state,” Musson said. “These policies are inadequate for financial protection, and you could be liable for the difference between the cost of damages in the event of an accident and your coverage limits.”
“If you need ways to save, you need to compare quotes from multiple vendors,” Musson said. “Some companies are better suited to different situations. You should also consider bundling home or renter’s insurance with your auto insurance, as you’ll likely be able to get a discount on each line of coverage.
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Bad Habit #3: Reckless Driving Record
“Bad driving habits can lead to accidents,” Kilgore said. And accidents can increase your car insurance rates.
“One way to save money on your insurance costs is to follow your good driving habits,” Kilgore said. “For example, many insurance companies offer smartphone apps to help customers understand their driving behavior and drive more safely. You can often get a discount just for your participation and earn discounts based on your driving score. The apps help you better understand your driving behavior and make changes to become a safer driver and save money.
Bad habit #4: ignoring security features
“A vehicle with [safety] is statistically less likely to be involved in an accident or be robbed than someone without these features,” said Ian Lang, Automotive Advice Editor at Bumper.
“Automobiles with high-quality safety equipment can qualify for premium discounts,” Lang said. “Several safety features, such as airbags and anti-lock brakes, and safety measures, such as anti-theft and engine cut-off systems, can qualify you for lower insurance rates.”
Bad Habit #5: Driving Habits
“You’re likely to pay more if you’ve had accidents or traffic violations than if you have a clean driving record,” Lang said. “Plus, you can pay more if you’re a new driver with no insurance history.”
“After three years of driving with a clean record, most insurance companies will no longer factor a reckless driving citation into your premiums,” Musson said. “So the best way to overcome higher premiums is to drive carefully. You may also benefit from lower premiums if you take a defensive or safe driving course.
Bad habit #6: Credit history
“It may seem like an overstatement to include credit history as a factor in auto insurance premium calculations, but it’s common practice,” Musson said. “Insurance companies claim that people with lower credit scores are statistically more likely to file a claim and cost the insurance company money. A few states have banned the use of credit history as a factor in insurance premiums, but where it is not banned, it is almost always used.
“It’s crucial to pay attention to your credit score and take steps to improve it…” says savings expert Andrea Woroch. “Start by setting up automatic payment for all your bills so you can rebuild a regular payment history and work on paying off debts, as this will improve your overall credit utilization rate. For a more immediate solution, consider changing your auto insurance policy in your spouse’s name (if married) as long as they have a higher score to reduce your annual premium.
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