Report: 3 Little Things That Can Explode Your Auto Insurance
Even if you have cheap auto insurance, you may have seen your rate unexpectedly rise by a significant percentage.
In this article, I will discuss three things that will increase your auto insurance rates. I will also look at how much increase each of these things will cost you.
The data comes from BankRate.com, which recently released its annual report on The real cost of insurance.
The report examines annual auto insurance premiums nationally and by state and finds that the current national average for an annual auto insurance premium is $ 1,674. The report also lists “life events” that can skyrocket your premium.
These 3 things can jack up your auto insurance by hundreds of dollars
Money expert Clark Howard says many motorists raise their insurance rates by filing claims for small incidents and fender benders that can be better sorted out without involving your insurer.
“You only want to make insurance claims when something bad has happened,” says Clark.
If you make a claim for a small incident, you risk ending up in an insurance company’s “penalty box”, according to Clark. “They can even put you in an industry database if you’ve made a complaint,” he adds.
Here are three examples of small incidents that BankRate.com says can drive your auto insurance rates up to hundreds of dollars.
1. A speeding ticket
Your head foot could cost you dearly.
In Hawaii, a speeding ticket will increase your fares by an average of $ 149 per year, while in Wyoming that number could be $ 537!
According to BankRate.com, the national average of adding a speeding ticket to your annual insurance premium is $ 355.
2. A car accident
A car accident can not only put you in the hot seat for a new vehicle, but it can also cause your auto insurance rates to increase.
According to the report, a car accident can add an average of $ 731 in additional fees to your annual premium.
An accident in California can add $ 1500 + to your premium, while in New York you can get a raise of $ 307.
Because car accidents play such a big role in auto premiums, Clark recommends that you get a dashcam. It could help you prove you’re not at fault if the question ever arises.
“I think of them as super-cheap insurance,” Clark says of dashcams. “I particularly recommend them for people who tend to drive more carefully.”
Clark.com’s sister site ClarkDeals.com regularly lists sales on dashcams.
3. A lapse of auto insurance coverage
This is easier to prevent than an accident: Failure to keep your auto insurance up to date all the time can cause your rates to rise.
An interruption in automobile coverage could costs you $ 187 in higher premiums, according to BankRate.com. This is the national average that his report found.
If you live in California, the average policy increase for an interruption in coverage is $ 63, while in Florida it is $ 337.
If you add up just those three things – a speeding ticket, an accident, and an interruption in auto coverage – you could end up inadvertently adding more than $ 1,200 to your premium.
Using the report’s national averages for all numbers, these three little “mistakes” could almost double the amount you pay for auto insurance each year.
|Car accident||$ 731|
|Abandonment of automatic coverage||$ 187|
One way Clark saves money on his auto insurance is to go for a higher deductible.
While it’s true that a higher deductible means you pay more money up front if you make a claim, Clark says there are two very good reasons for choosing a higher deductible:
- This reduces the overall cost of your premium.
- This discourages you from making small claims that increase your rates.
“Take your deductible as high as you can,” says Clark. “As high as your insurer will allow, or if you have a loan on the vehicle, the lender will authorize. It will usually be $ 1,000, ”he says.
Want to keep more money in your wallet? Here’s how to save on auto insurance.