If you get cheap car insurance you will typically end up getting exactly what you paid for. Money is a good thing to have, and if you are doing it right you typically want to keep some around for a rainy day. But sometimes that insurance bill takes a bite out of that plan. There are typically a couple of reasons for that. Every individual is different as we know, and to the insurance company that is the main reason one person pays more than the other. Insurance companies are just that companies, and in order to be a successful company you have to make profits. If you ever saw a commercial that says the insurance company cares about you and you believed it, I’m sorry they lied to you. A person can care about you, like your insurance broker, your agent, the support person that works for the insurance company, but the company could care less about you, and to prove my point, don’t pay your bill, and see what happens.
The insurance company makes money by insuring individuals who do not pose a risk of an accident or claim. If you do not have any accidents or violations, have been driving for several years and have great credit, you will have the pick of lower cost insurance policies, compared to the person with accidents, violations, and a poor credit history. Actually, even though the insurance company won’t say it, they do not want people with accidents and poor credit. Why would they? These people cost the insurance company money. Now notice that I have credit as a criteria in the decision process of the insurance company. I do not know who came up with this, but it would seem that insurance companies believe that if you have poor credit you are less likely to drive safely. I actually think it is the dumbest thing, because a person having financial trouble is no more likely look to cause an accident than a person in a better financial situation, but it is a criteria that most of them go buy, so do not bother saying it’s not fair, write your local congressman or senator to change it.
Back to the point, how to get lower cost insurance. First, think about what causes high cost insurance:
- Location of Garaged Vehicle
- Credit Score
- Driving History
if you lack in one you have to be strong in the others. If you have a bad driving record you are going to get hit hard regardless, unless you have a good credit score or the area where the car is garaged has a low claim history. If you have a good standing in two out of the three you have a better chance to get lower cost insurance than a person who rates poorly in all three or in two out of the three. Note though if you rate well in all three categories, talk to an insurance Broker, because he or she should be able to find you the best rate available.
The fact that we are all different is the reason why some people will go to an insurance company after being referred by a friend and get a rate not only higher than what their friend got, but maybe higher than what they were paying with their current insurance company.