car insurance

Paying too much for auto insurance?

When it comes to auto insurance, nobody wants to pay more than they have to for coverage. Time and time again, we hear of ways to cut auto insurance costs in an effort to change how you’re viewed by (and thus billed by) your insurer. The team at recently released a guide to auto insurance which begs the question: what can you do to actually take charge of your own insurance rate?

Be a better driver. I know, I know — this sounds like a cop-out strategy. But think about how many times in the past you’ve been driving in a distracted manner or perhaps gave into your own road rage and engaged with another angry driver. It happens to almost all of us. Now imagine you could see into the future and find out exactly which driving mistake you were making that led to a future accident. You would avoid doing that thing, right? Taking control of your own driving behaviors is a way to reduce that risk and effectively control the number of times you’re doing something that could cause an accident. And while not all collisions are due to driver error, this is one way you can take control of your role in driving risk.

Take care of the small stuff yourself. Insurers make money off of your premiums, right? And of course, as soon as you’ve filed a claim, your premium goes up as you’ve now shown yourself to be more of a risk to insure. Some of those claims are truly things that you can take care of yourself, like broken side-mirrors. Make an effort (within reason) to make the small fixes to avoid spending more money on a post-claim premium increase.

Shop around for a new policy. No, we’re not saying you should switch your insurance around all the time. In this day and age, companies and service providers have access to an astounding amount of data about you: your demographics, your interests, and even your shopping habits. In the insurance world, these data can be used in the practice of price optimization: a strategy which determines how likely you are to shop around for a new insurance rate. If a customer has been a long-time policyholder and doesn’t have a history of shopping for a new rate, the insurer guesses that they can raise this person’s rates with a relatively low likelihood of them leaving for a new insurer. In this way, they keep rates lower for those who are at risk for leaving, and high for those who aren’t. One way to fight against price optimization is to shop around and compare new quotes at least every two years to show that they need to offer a competitive rate to keep you.

At the end of the day, auto insurance is a complex topic. And while we’d like to pay as little as possible, remember that the lowest rate isn’t necessarily the best. For more information, you can take a look at the original guide from here: