Car insurance can be as mysterious to drivers as the parts in their vehicle, but learning the ins and outs of auto insurance is just as important as taking care of your car. In fact, they go hand in hand. Still, you need to know the basics of auto insurance to pick the appropriate coverage.
What Every Driver Should Know About Car Insurance
Nearly 215 million drivers carry car insurance in the US, but many of them don’t know why they need it or what their options are. Here’s 9 things you probably didn’t know about car insurance.
1. Many Factors Affect Car Insurance Rates
Your driving record, credit history, coverage selection, deductible amount, car insurance history, car make and model, and ZIP code all affect your car insurance rates. There are plenty of non-driving factors that lead to a rate adjustment, such as occupation, education, and gender.
2. Young Drivers Pay Much More For Insurance
While it isn’t fair, younger drivers pay more for car insurance. If you’re a man in your twenties, you’ll pay $400 more than a woman in the same age category, but why? Statistically speaking, men are more likely to get into accidents than women and are considered a higher risk.
For this reason, it is recommended that young car owners look into plans such as car insurance for college students. This can help save a substantial amount of money.
3. Uninsured Motorist Coverage Isn’t a Waste
If you live in a no-fault state and you get in a car accident, it doesn’t mean you’re not at fault. What it does mean is that you’re required by law to carry auto insurance to cover the cost of your bills. Uninsured motorist coverage protects you from uninsured drivers who hit your car.
4. Insurance Rates Vary A Lot Between Companies
Each insurance company has its own formula to assess your risks. If you don’t compare prices using online tools and websites like Cheap Insurance, there’s a high chance you’re overpaying. When looking for auto insurance, decide what you need before comparing coverage costs.
5. Don’t Let Your Policy Lapse, or You’ll Pay More
If you drive around without insurance, you’re seen as a risk. But even if you don’t, you’ll pay more for your next insurance policy if you let it lapse. To avoid these unnecessary charges, pay your insurance before the expiry date or switch to another company while you’re still insured.
6. Shop for Permanent Auto Insurance Discounts
Most auto insurance companies will give you a discount if you have a clear driving record, anti-theft or other car safety features installed in your car, or pay in full each month. Ask your insurer if they offer these discounts and apply as many as possible to lower your payments.
7. A Higher Deductible can Lower Your Premium
When it comes to insurance, a higher deductible equates to a lower premium. However, if you get in an accident, your insurer will pay less to repair your car. With that said, if you’re a safe driver or you don’t use your car often, switching to a higher deductible can save you money.
8. The Color of Your Car Won’t Impact Your Premiums
In the past, insurers would charge drivers more if they drove cars in a certain color, one of them being red. Fortunately, there’s no correlation between the color of your car and your insurance premiums. However, the make and model of your car will determine how much you’ll pay.
9. Insurance is Tied to the Car, Not the Person
If you lend someone your car and they crash it, your insurance has to pay for the damages. That’s because your insurance is tied to the car, not the person. To keep the other driver and your wallet safe after an accident, you have to add them to your auto insurance policy.