Things You Should Know About Buying Auto Insurance

by Maddi Butler

If you’ve purchased insurance before, you’ve probably heard it’s important to shop around before you buy. But why? If you go with the first policy you look at, you risk missing out on a better rate elsewhere. Only about a third of people take the time to shop around, but those who do typically save around $356 every year.

Even after you choose a policy, though, it’s still important to compare rates on a regular basis. If you’re not doing this every six months, you should be doing it once a year. Here’s why: life changes, even seemingly insignificant ones, can affect your rate. These are some factors that could change your insurance and help you get discounts.

The value of your car will change.

Unless you have certain sports cars or a classic car, most vehicles don’t gain value over time. In fact, just the opposite is true, whether we like it or not. Your insurer should account for this if you have a non-luxury car. The typical rate reduction should be about 2.5%—this doesn’t sound like much, but it certainly adds up! Luxury cars depreciate about twice as fast each year.

Always make sure your policy reflects your car’s depreciation. Even better, try to get the exact percentage your insurer discounts your policy each year. That way, you can use it as leverage to get better discounts when comparing rates.

Your last traffic violation was at least 3 years ago.

Depending on when you had a violation, this may not affect your rate frequently. Typically, when you get a speeding ticket, it will affect your rate for three years—you may see an increase. Many violations will go out of date after three years, after which they should fall off your insurance and bring your rate back down. However, always check to make sure your insurer has accounted for this change.

You got married.

You have probably heard this before, but if you recently got married, your rate will probably change—for the better. Make sure your carrier knows this, so you can get the great discounts many insurers offer to married couples. Be sure to ask your married friends what their discount is, too. If it’s higher than yours, use this information to shop around and get a better rate.

You moved out of the city.

Cities are notoriously terrible to drivers. With tons of cars, bumper-to-bumper rush hour traffic, and hazards like theft and potholes, your car could be at risk more often than you think. These things all serve to drive your rates up when you live in the city. If you’ve moved into a suburban or rural area, you should be paying less! The hazards mentioned above are much less prevalent in rural places. Always double check with your insurer that these changes are taken into account on your policy.

You don’t drive far or often.

People who drive a lot don’t save as much on their insurance, because insurance companies see this as a higher probability these drivers will encounter an accident. However, if you drive under a certain number of miles each year, you’ll typically qualify for a discount with your insurance company. These “pay-per-mile” plans help driver save hundreds every year, so if this sounds like you, make sure you’re getting this discount.

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