There are a number of factors that impact what you pay for car insurance, not all of which are related to your driving record or the car you drive. Last week I introduced 8 car insurance discounts you need to know about (http://bit.ly/YHt1kA). There are 4 more factors that help you save money on car insurance. They aren’t all discount related but they can help you hold on to more of that hard earned money!
Credit: Most insurers who write car insurance in Texas have used credit for the last 8 to 10 years to help determine a person’s rate. This has been adopted in most states throughout the U.S.as well. The study that led to the adoption of this practice demonstrated that people with low credit scores file more claims which leads us to:
- People with low credit scores pay more for car insurance.
- People with good credit scores pay less for car insurance.
If you want to pay less for all your insurance such as car, home, renters, umbrella, etc. work to pay off debt and improve your credit score. (See http://bit.ly/QjwDH9 for 8 steps to a better credit score).
Payment Method: When working through your renewal or comparing car insurance among different companies, be sure to discuss all your payment options and their impact on the total premium. How you pay for your insurance impacts the overall amount you pay, but even this varies from one company to the next.
- Most companies provide a discounted rate when you pay the total premium in one payment whether it’s a six month premium or an annual premium.
- Some companies provide the same pay in full discount if you elect to have a two payment plan, half down and half in 6 months on an annual plan
- There are even some companies that actually prefer for you to pay monthly, so they discount the rate on a monthly plan and charge a slightly higher rate on an annual payment.
Car Location: Where you live has a very definite impact on your premium. Take the Dallas / Fort Worth area for instance.
- Dallas County and Tarrant County have the highest car insurance rates. The rates for most carriers are about the same.
- Collin County is slightly lower than Dallas and Tarrant County
- Denton County is lower still
- The lowest rates are found in Johnson, Wise and Rockwall Counties
Where you live also impacts your commute distance and time spent in traffic, so take that into account too. A long commute actually adds to what you pay for car insurance.
Affiliate Discounts: Several insurance companies provide affiliate programs that contain discounts within them. The Hartford has the largest affiliate program which is associated with AARP. If you’re 50 years old or older, this can be a very attractive program for AARP members.
Other insurers offer discounts through employers or through alumni organizations. Two such companies are Travelers and Liberty Mutual. Even with this discount compare the overall pricing with other carriers. A discounted rate may still be more than another company’s rate.
What other savings have you found? Share your thoughts, comments and questions with us on our Facebook or Google + page or in the comments section of our blog. I’d love to hear from you!