Auto Insurance – Understanding Auto Insurance to Get the Cheapest Rates
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So, you’ve decided to take a look at your auto insurance to see if you are getting the cheapest rates possible. When you put your basic information into a free online service and it comes back with several quotes, you may be confused as to why the rates are so different. Sometimes, even when the levels of coverage are the same, there could be differences in premium amounts that are several hundred dollars apart. How is this possible? Well, the insurance companies vary widely in the factors that they use to evaluate the risks associated with their customers.
One factor that may be keeping you from getting the cheapest rates for your auto insurance is your credit score. That’s right. That same pesky three digit number that causes your increased rates on mortgages and credit cards may also be responsible for bumping up your car insurance premium. Not all companies use the credit score as a factor in determining your rates, so if you know you have a low credit score, ask your agent which companies might be a better match for you. Conversely, if you have a good credit score, it could work in your favor to go with an insurance company that uses this as a determining factor in your premium.
Your education level is another contributing factor to your auto insurance premiums calculations. It sounds a bit off to think that the degree you have earned helps determine whether you are a good driver and a better financial risk, but it is true. Some companies will have lower premiums for those with higher education levels. If you have a Master’s degree, this is great news. If you have a GED, you should talk with your insurance agent to find out which companies don’t use education in their premium assessments.
Auto insurance rates may also vary depending on your occupation. This at least makes a little more sense. The telecommuter with the home office may get a break on insurance premiums, while the traveling salesman might be assessed a higher rate. Depending on your particular situation this may or may not work in your favor. The point here is that different companies look at different factors in determining their rates. The trick is to work with your agent to determine which companies will factor in the items that put you in the best risk bracket and get you the cheapest rates.
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