If you’ve bought car insurance during the past few years, you’ve probably suffered through the annual increases that have outpaced inflation. Unfortunately, that trend is likely to continue in the year ahead.
Auto insurance rates in South Texas continue to climb. Insurance agents say there are a few reasons for the increase.
“There are three major reasons. One is the traffic. Traffic has really gotten busy here in the Coastal Bend area, especially around the S.P.I.D. and other parts of the city. The other thing is the cost to repair the vehicles once they have been damaged. The vehicles are high tech now, between backup cameras, all kinds of sensors built into it, airbags, all those things cost more to repair then they did in the past. The third thing may be the most is texting and driving. So many drivers are out there texting, driving, and talking on their phones and driving even though it’s against the law in the city limits, people do it every day,” said Farmers insurance agent Ed Cantu.
Cantu says it really does not matter if you have a vehicle with all the new technology or not, insurance companies base their rates by overall losses throughout the state and nation.
“The things that cause the rates to go up is not the insurance companies, it’s the drivers. When you have an accident and may have not caused it directly, somebody else in the community is going to have an accident. Therefore because insurance cost should spread across all policies holders, and even though you have not had any accidents, well somebody has to pay for those losses. And so it’s spread out among all of us, even though some of us are careful drivers,' said Cantu.
But there are some things that you can do to help bring down your insurance rate.
“You can do things to help reduce your personal cost. One, be a good driver. Don’t have any accidents, and don’t have any citations. A lot of the rates nowadays are based on statistics, and statistically, if you have a good consumer score, you are less likely to have an accident. So, be mindful of how you handle your finances. Another thing make sure you are getting all the discounts you possibly can,” said Cantu.
Navigating Rising Insurance Premiums:
· 1. Shop Around. In a 2014 survey, Consumer Reports found that 68 percent of respondents said they had not comparison shopped for auto insurance and 53 percent had been with the same insurer for at least 15 years. But you can save money—possibly hundreds of dollars—by switching. And there’s no reason to wait until you get your next renewal notice to make a change. You can cancel an expensive policy at any time and you will be refunded the prorated premium for the remaining time on your policy. (Just wait until your new policy is active.)
2. Don’t Be Blindly Loyal. While it’s true that some insurers offer discounts for long-term policyholders, and for bundling auto coverage with other insurance, such as homeowners or renters, there’s no guarantee those discounts will save you money. You may find that another insurer can offer you a lower rate.
3. Before You Buy a Car, Compare Insurance Costs
Before you buy a new or used vehicle, check what it will cost to insure. Auto insurance premiums are based in part on the car’s price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft.
4. Higher Deductibles Could Mean Lower Premiums
A deductible is the amount you pay before your insurance policy kicks in. By choosing a higher deductible, you can significantly lower your costs. Before choosing a higher deductible, however, be sure you have enough money set aside to pay it if you have a claim.
5. Reduce Coverage on Older Cars
It pays to review your coverage at renewal time to make sure your insurance is in step with your needs. For example, if your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective. When this is the case, consider dropping collision and/or comprehensive coverage. It’s easy to research the worth of your vehicle online—Kelley, National Association of Auto Dealers (NADA), and TrueCar are among the many free sites available.
6. Buy Your Homeowners and Auto Insurance from the Same Company
Many insurers will give you a break if you “bundle” two or more types of insurance, or have more than one vehicle insured with them. Most offer some kind of discount to loyal customers. Even so, it still makes sense to shop around! Compared with a multipolicy discount from a single insurer, you might still save money buying from different companies.
7. Maintain a Good Credit History
Establishing a solid credit history has many benefits, including lower insurance costs. Most insurers use credit information to price auto insurance policies. (Research shows conclusively that people who effectively manage their credit make fewer claims). To be sure you’re getting the good credit you deserve, it’s a good idea to check your credit record on a regular basis to be sure all information is accurate.
8. Take Advantage of Low Mileage Discounts
Some companies offer discounts to motorists who drive less than the average number of miles per year. Low mileage discounts can also apply to drivers who car pool to work.
9. Ask About Group Insurance
Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups or from other associations.
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