(Newswire.net — March 29, 2021) — For most people, car insurance is confusing. There are countless things that have to be taken into account and most of the terms used are not general knowledge for the average person. In addition, insurance companies want to take advantage of your lack of knowledge. They will often include policies that are not needed and will be interested in getting the most money from you for the least possible risk.
In order to clear some of the confusion, here are some facts about the best car insurance that you absolutely need to be aware of.
Car Insurance Is Tied To The Car?
Technically speaking, car insurance is always tied to the vehicle. When someone drives the car, the insurance policy is activated during accidents. The problem is that not all the policies cover all vehicle uses. This is why you always need to read the policy’s fine print before someone else is allowed to drive the vehicle. You can also exclude some people that live with you so that your policy cost can be reduced.
Is Car Type Important?
Total car value, its purpose, vehicle type and safety ratings are all taken into account when policy costs are calculated. However, this can be a little confusing since when you buy a new car, sometimes you might end up paying more. It is always important to do the math and see what different insurers offer. In addition, other important factors considered by insurers include how much you drive per year, where the car is parked and the extra expensive features that the vehicle has.
Will Driving Record Affect Insurance Costs?
This is one thing that most car owners get right. Every single claim that is made is entered into a huge database that can be accessed by literally all insurance carriers. Whenever making claims, insurance premiums most likely go up.
The important thing to remember is that even if you shop around for a brand new insurer, records are still accessible and driving records are considered.
Is Credit Score Important?
For many, it makes no sense that credit score can impact car insurance costs but this is actually the case. The only US states where insurance companies cannot use credit score as a main deciding factor when calculating policies are Hawaii, Massachusetts and California. Basically, if you live anywhere else and you have a bad credit score, you are labeled as a higher risk and insurance companies charge more.
Does It Count Where You Live?
As an example, Michigan’s car insurance premiums were 64% higher than the US national average so insurance costs are impacted by where you live. Sometimes, car owners might consider changing official residence to save some money.
Will Age Impact Car Insurance Premiums?
This is a huge secret that car insurance companies really do not want anyone to know. Age will impact premiums. The oldest and youngest drivers always end up paying more. This is particularly true for those that are 18. Prices do steadily decline until reaching 25. Insurance premiums remain around the same during the following 30 years. When a person reaches 55, premiums once again start to go up, with a huge spike at 75.
It needs to be added that the owner’s education level, marital status, gender and sometimes even job affect insurance rates.