Auto insurance is a surprisingly stressful monthly expense. It’s relatively expensive to start out with, but as soon as you file a claim, your monthly payments will hit the roof.
If you want to save yourself the headache and cash that shifting auto insurance rates bring, you need to understand the ins and the outs of the market. Here are some of the best kept secrets about auto insurance.
- Not Everyone Pays the Same
Despite rumors that women are the worst drivers, women actually pay about 12 percent less on their premiums than men do. In reality, men tend to drive more aggressively and make more claims.
What’s more, if you’re a non-smoker, you can usually call your company and ask for a discount of up to 15 percent on your premium. Smokers tend to be more distracted drivers and require interior replacements more often than non-smokers.
Additionally, teenagers and the elderly will increase your rates for obvious reasons. If you have someone on your insurance in these age ranges, it can potentially double your premiums.
- Low Premiums Aren’t Always Best
Insurers will dangle a low premium in front of customers to suck them in, and it often works. What they don’t tell you upfront is that the deductible is high and the coverage limits are very low. You often end up paying much more in the long run when you go for the lowest premium possible.
- Local Rates Are Often Cheaper
Instead of shopping for insurance at the national level, try looking a little closer to home. If you live in North Carolina, for example, home to some of the lowest premiums in the nation, you can look into state-funded insurance that’s much cheaper than what you’d pay for a larger company.
- Accident Forgiveness is Rare
Another tactic for luring in unsuspecting customers is promising accident forgiveness. Essentially, the company states that if an accident is minor or your first infringement, they won’t raise your payments following the claim.
What they don’t tell you is that the accident must be very minor (usually worth less than $2,000 in repairs for both your car and the other property) in order for you to qualify. Most accidents cost much more than $2,000, and accident forgiveness shouldn’t make a big difference in your insurance decision.
- Payouts Are Slow
After getting in an accident, you’ll need to have your vehicle assessed by an appraiser, which can take up to a week. Then, it can take the appraiser another week to submit the report, and up to two weeks for you to receive your check in the mail. Though it’s not always the case, payouts can be extremely slow, potentially putting you in a bind if an accident occurs.
Insurance companies make their money on customer ignorance. By understanding how premiums work and the way insurers think, you can save money and get the best deal on your car insurance.