If you have to ask yourself if you’re paying too much on auto insurance, the chances are you’re overpaying. Some insurance companies prey on new drivers or drivers in “high-risk” areas to justify their increased costs. This can be problematic and inconvenient for many people, especially if they can’t afford the premium or deductible.
How can drivers tell if they’re paying too much for car insurance? Below are the factors contributing to your yearly or monthly costs and three things to do to ensure your insurance company isn’t adding fees behind your back.
Factors That Contribute to Your Insurance Rate
Many people pay more than they should for their car insurance for unavoidable reasons like living in a major city or an area prone to theft. In contrast, other people pay higher rates due to their driving records or being deemed high-risk drivers.
Other factors that contribute to your insurance rate include the following:
- Your car has high repair costs
- Your car has poor safety ratings
- Your credit history
- You rent your home
- You have a new or teen driver on your policy
- You only have auto insurance (instead of bundling)
- You have optional coverage
- You let your coverage lapse
Don’t Stop Shopping
The best way to determine if you’re paying too much on car insurance is by shopping around. The price of auto insurance premiums can differ from one insurer to another. It’s important to shop around and see which insurer can offer you the best price according to your driver profile. Most insurance companies aren’t expecting their customers to continue shopping after choosing insurance coverage and will charge higher rates.
Every year, shop around for other auto coverages and see which insurer offers the most budget-friendly price.
Ask Your Agent for Discounts
Most insurance companies will offer discounts or options to lower your premium costs. However, they’re not going to hand it out to you—you have to ask. Don’t hesitate to ask your insurance agent if they’re offering any savings to help you get a cheaper policy. Also, check online for any discount or referral options.
Don’t Forget To Update Your Annual Mileage
The more miles you have on your vehicle, the higher the risk of being in an accident. Although many people have reduced their mileage by staying home more often or working from home, it’s always important to monitor your mileage. By accurately reporting the miles you drove for the year, you could possibly get a lower rate or other rewards for your premium.
