Some people think that since they have a used car, then they do not need auto insurance. This is categorically untrue. By law, most Georgia drivers must have a policy and they must keep it active. However, since your policy is going to cost you, then you want to do what you can to be able to afford it.
Consider some of the ways that your agent can help you optimize your used car’s coverage so that it will save you money.
Why Car Insurance Rates Might Go Up
Car insurers base customer premiums on a variety of risks. A risk is the policyholder’s likelihood of filing a claim on their policy. Therefore, it represents the risk that the insurer might have to pay out for a claim. The more likely you are to cause the insurer to pay, the more likely you are to pay more for your insurance coverage.
An insured driver’s rate might go up for a variety of reasons. You might see yours rise if you:
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Increase your policy’s coverage limits.
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Let your policy lapse or if you drive uninsured and get caught.
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Are at-fault for an accident that harms you, damages your vehicle or harms others.
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Move to an area where car insurance claims are more frequent.
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Drive a vehicle (new or used) that is worth a lot of money.
In some cases, used car owners will see their insurance premiums fall as their car ages. However, if you make a claim on your policy, then you will likely see your premium costs rise.
In a way, this cost represents the theory of supply and demand. If there is more need for coverage, then someone might have to pay more. Even so, there are many ways you can keep your coverage cost manageable.
Step 1: Carry the Coverage You Need
If you finance a car, then your lender will likely require you to carry collision insurance & comprehensive insurance. These two pieces of coverage also go by the name physical damage insurance. Collision insurance covers the vehicle when damage occurs in a wreck. Comprehensive insurance covers vehicle damage from non-wreck hazards. It might cover damage from fire, severe weather, falling objects and more.
Once you pay off the car, you might have the option to drop or keep this coverage. The question is, should you?
Over time, your car's value will begin to depreciate. As a result, the amount that you might be able to recover from a physical damage claim might not be worth the claim, particularly if deductibles apply. So, you might be able to drop your damage insurance.
Step 2: Ask About Discounts
Most auto insurance companies offer premium discounts. Nearly all drivers can often qualify for a variety of savings, particularly payment discounts. For example, if you pay your premium in full at the start of your term, or if you pay through automatic payments, then you might save on your premiums. Other discounts might apply if you have been with the same insurer for several years or if you are a student.
Step 3: Adjust Your Deductible
Most auto policies include deductibles. These are the costs that the policyholder must pay towards auto insurance claims. So, if you have a $1,000 deductible on your car insurance, then you pay the first $1,000 of your damage costs. Your insurer then pays the remainder of your damage costs once you settle on the cost of repairs.
If you increase your deductible (such as from $1,000 to $2,000), then you agree to take on more of the cost of damage yourself. This shifts cost burden from the insurer to the insured. As a result, your premium might decrease.
However, if the cost of your damage is less than the deductible cost, then your policy will not pay. This is especially true if it come to damage to used vehicles, which often cost less to repair. Always choose a deductible you can afford to pay on your own.
Step 4: Take a Driving Course
Many states allow drivers to take defensive driving courses to earn discounts on their car insurance. These classes help drivers re-learn critical tips to keep themselves safe behind the wheel. This is a great benefit for drivers who have received tickets or other penalties. Passing a class might help them get these charges dismissed. However, almost any driver can qualify for this benefit by completing the coursework.
Step 5: Work with an Independent Insurance Agency
Every client should have flexibility to get the car insurance that is in their financial interest. Sometimes, that means looking at policy options from multiple insurance carriers. Independent insurance agencies like Peachstate Insurance work with numerous insurance carriers. Each offers different benefits and levels of affordability. We can compare the policy options in our portfolio. That will allow us to help you locate a policy that not only offers you appropriate coverage, but also that offers the best cost benefits.
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