You must understand why you need auto insurance premiums for your car. You may have a neighbor who lives right across the street but pays a smaller premium than yours. Note that no premiums are the same for every individual owning a car. Some may say they are calculated randomly.
However, this article will show that the calculations of insurance premiums will include a plethora of factors which determine the risk involved and how much it costs.
You might think that insurance for your car costs more but it will save you more in the long run
You must be knowledgeable when it comes to securing insurance premiums for your car. If you know the factors that auto insurance derive their premiums, you can easily determine your rate and have the premium you can afford. Philkotse.com has your back with these helpful tips:
1. Shopping for insurance companies
The best way to get the right insurance premium for your vehicle is to search for companies that offer the best deals. However, you don’t need to choose the cheapest as it may also mean a lot. Choose reliable insurance companies that give you competitive premiums by asking them for insurance quotes and what they usually cover.
Also, ensure if they properly cover all your needs and if they are a reputable and reliable company. This is essential if you’re planning to renew a cover or seeking other providers for the coverage. Never do it automatically as you can have a higher chance of getting lower premiums.
Invest time to compare prices and what the insurance company offer for your car
2. Having tickets or accidents
This is the most obvious reason why you’re probably paying more on premiums. You are considered a “high risk” driver. Even if you didn’t receive points for a ticket, it could still be a factor. If you are searching for insurance and had accidents before, try to check with your current company if you are considered at fault or not at fault.
When they say it wasn’t your fault, insurance will not count against you. If the accident was your fault, a certain percentage would be charged against you and may affect the premium.
Drive smart and carefully to avoid being labeled by insurance companies as a high-risk driver
3. Knowing your location
This is one huge factor that can affect the price of the premium. Insurance companies use statistics on areas that are considered high risk for claims. The claims can include vandalism, grand thefts, and accidents. As a general rule, rates for living in the city will come higher than those in suburbs and surrounding areas.
Your insurance agent can best inform you if you belong to a higher rated area. If you want to keep costs low, a solution may be to move to a cheaper location, like buying a new house in the province.
4. The type of vehicle you drive
If you own a sports car, it will be costlier to insure than a family sedan. Imported cars even have higher premiums due to the additional costs of parts and labor for the repairs. Generally, if you have an expensive car, you need to pay more premiums, as in the event of total loss, insurance will pay out the whole amount that it’s covered.
Furthermore, some models may be cheaper to repair during a collision claim but may involve a higher risk of bodily injury. To ensure you pay less, do some research and get information before buying your next car. Check with LTFRB for vehicles which you can drive safely.
You can also check with local authorities like the police or NBI on the most common types of vehicles that are most likely to be stolen. If you understand all these, you will know how much premium you’re going to pay for the risk.
The more expensive your car is, the higher your car insurance premium is likely to be
5. Your age can be a determining factor
If you’re aged below 25 years old, you’ll pay more on premiums as statistics show you are more prone to tickets and accidents. However, there are insurance companies that provide significant discounts for students with good academic records and if they have completed driver training programs.
Drivers over 50 years old are also eligible for discounts; however, the rates can go higher when they reach 75 years old.
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Statistics approve of this observation as it shows that younger drivers are more prone to getting involved in accidents and having tickets
6. The mileage of the vehicle
If you have more mileage covered by your vehicle each year, then it has a higher propensity for accidents due to increased exposure. You can combat the issue by using public transport, carpooling, riding a bike or by mere walking.
If your mileage is just the average, you’ll definitely save on premiums. The wear and tear of your vehicle are reduced, you save some pesos for the fuel, and you create a better environment.
While there is some wiggle room, generally a driver with low mileage is considered someone who drives between 0 and 7,500 miles per year
7. Required safety features in place
This is an important factor to consider when you plan to buy an insurance coverage. If your car is equipped with airbags, anti-lock brakes, daytime running light, and active resistant system, insurance companies can provide discounts. You may consider installing a GPS tracking device or anti-theft device for added features. It’s a way to get lower premiums as insurance knows your car is properly protected.
Look at this list of recommended safety features for your car.
Equipping your car with safety measures not only lowers insurance costs but also protects you and your passengers
8. Multiple policyholders
Many insurance companies will provide discounts and lower premiums if you acquire other insurance coverage aside from your vehicle. You can have your home or life insurance policies covered by them. Ensure you check the premiums of all the coverage. It’s better to stick with one insurance package than having several insurers handling your policies.
Multi-car insurance lets you bundle all your car insurance policies together with a single insurer, either as multiple policies held together or merged into a single policy. You may even get a discount on your premiums if you do this.
Multi-car insurance lets you bundle all your car insurance policies together with a single insurer
9. Pay a full annual payment for your insurance coverage as monthly payments can end up costing more
The full payment can seem a burden as you need a larger amount, but you’ll see how you save more pesos than what you expect. If you have full payment, you concern yourself lesser with insurance premiums and take care of other expenses in your household.
Not worrying about monthly payments is a plus from saving when you pay annually for your car insurance
The tips listed above will guarantee that you get reduced premiums for your vehicle while obtaining discounts from the insurer of your choice. You definitely need to find an insurance company that you can trust. This is the best resource, so you will understand how they derive your individual rate. Just ask and request for their assistance.