Why Is My Car Insurance So Expensive, And What Can I Do?
Most drivers are on the prowl for cheaper auto insurance
, and spend a lot of time looking at side-by-side comparisons on the Internet. They could save a lot of time by simply moving to Maine.Insure.com recently released a list ranking states by average annual cost of car insurance.
Topping out the list was Louisiana, where the average premium is $2,510.87 (this compared to Maine's $902.85).
Virginia came in at number 37, with an average of $1,233.36 (this is slightly under the national average of $1,429.26). Washington, DC ranked number 7, with typical costs of $1,753.19.
So aside from leaving the state, how do you keep your rates low? The formula for calculating your rate is only slightly more complicated than cracking the Da Vinci Code, but here is a typical breakdown: Tier I: Primary zip code, age, gender and marital status Tier II: Driving record, credit history, make and model of car
Let's break it down. It's hard to change the first-tier factors (and if you are willing to make those changes over car insurance rates, then... you must just have terrible coverage to begin with). Some may be wondering why zip code matters. To begin with, all states have different laws pertaining to vehicle insurance requirements. Additionally, remember the first rule of real estate: location, location, location! Factors such as urban vs. rural and number of uninsured drivers on the road with you will affect the overall "risk factor" of living in certain areas. As far as the others in this category, we're all familiar with the magic birthday of 25, and know that only drastic measures can change gender or marital status.
Now let's look at what you can change. Insurance companies assign a different risk rating to each individual make and model. Different insurance companies will have different systems in place to estimate this, though it's possible to find good examples online (check company websites and services like MSN).
While it's still being debated in most states, your credit history can weigh in on what you pay for insurance. Something like this will also vary from company to company.
Lastly, your driving record. In terms of factors you can impact, this is the big one. Speeding tickets, traffic tickets, reckless driving charges, DWI/DUI charges, are just SOME of the things that can increase your premiums, now or further down the road. Did you know that even no-fault accidents (accidents in which you were involved but did not cause directly) can cause your rates to increase?
The best thing to do if you receive a ticket or charge or are involved in an accident is to contact an experienced attorney in your state to discuss your options, and how best to deal with insurance companies. If you are involved in an accident, it is usually better to contact your attorney before you give a statement to your insurance company.
Copyright (c) 2010 James Parrish
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