5 Facts About Car Insurance That You Probably Didn’t Know
Purchasing auto insurance is an excellent way to ensure you don’t pay for damages if your car is involved in an accident. Besides auto crashes, insurers sometimes cover you for loss or damage from fire, vandalism, theft, and natural disasters.
However, failure to understand how auto policies work, local laws, and other important details can make auto insurance super complicated and expensive for you. But worry not, as this article highlights five important facts about auto insurance that you probably didn’t know;
- Insurance Prices Vary by State
Auto insurance rates are often affected by factors within your control, such as your age, gender, car model, credit rating, driving record, and level of coverage. However, sometimes factors out of your control, such as state insurance coverage regulations, may affect insurance rates.
That means it is not unusual for two states to have totally different insurance rates. For example, Maine is the cheapest state, with an average car insurance rate of $858 a year, whereas Louisiana has the most expensive car insurance rates, averaging $2839. That is about three times the amount in the least expensive state.
Therefore, when buying auto insurance, be sure to research info about car insurance in your state so you can estimate how much you should spend.
- You Can Take Advantage of Discounts to Lower Your Insurance Costs
Some insurers may offer a discount for paying the entire insurance premium in advance and subject you to administrative costs when paying monthly. So, before paying your auto insurance, inquire about any discounts you may be eligible for or any additional costs you may incur if you do not pay in full.
Other typical discounts may include:
- Multi-policy: if you want other forms of protection in addition to auto insurance, purchasing numerous policies from the same insurer might save you money.
- Multi-vehicle: When you get insurance for multiple cars from the same company, you may be able to secure a discount.
- Safe driver: Insurance companies offer discounts to safe drivers as they rarely file claims.
- Homeowner: You may be able to save money on your car insurance if you own your house instead of renting.
- Your Age and Gender Affect Rates
According to the Centers for Disease Control and Prevention, teenage drivers are three times more likely to cause a crash than those drivers 20 years of age and older. As a result, the insurance premiums for younger drivers are often higher than those of older drivers.
Additionally, males under the age of 25 are burdened with higher insurance costs than women of the same age. However, the difference in rates narrows as drivers age.
- Your Insurance Provider Can Cancel or Non-Renew Your Car Insurance Policy at Any Time
An insurance policy can be canceled at any time during the first 60 days of service, regardless of the reason. After that, an insurer can cancel your policy for certain reasons, including:
- Nonpayment of insurance premiums
- Revocation or suspension of your driving privileges
- Health issues that make it impossible for you to drive.
- Lying in an application or when filing a claim
After receiving an email from your insurance company that they are ending your coverage, you’ll need to take action quickly. Doing that will help you avoid fines, jail time, and other possible consequences that may follow if you drive while uninsured.
- Auto Insurance Follows the Car, Not The Driver
The general rule about standard auto insurance is that it follows the car and not the driver. Therefore, if you lend your car to your friend and get involved in an accident, your insurance provider will cover the damages, not your friend’s insurance.
You should avoid lending your car to friends who have a poor driving history. In fact, unless it is an emergency, you should be very keen on who drives your car.