6 Car Insurance Secrets Your Insurer Won’t Tell You

Obtaining a good auto insurance policy is important for drivers as it provides financial security in the event of damage. In most countries around the world, having car insurance is a legal requirement and if a driver fails to maintain this coverage, they could be in violation of the law.

In Canada, for instance, car insurance is required for all drivers. If you fail to get car insurance, you could lose your license for up to one year and have your vehicle impounded for three months. In addition to the fine imposed by the court, you may also be subject to a 25% victim fine surcharge under the Provincial Offences Act.

However, landing a great deal for a car insurance plan can be quite difficult. Everyone wants to lower the price of their auto insurance premium. People often make trivial mistakes due to a lack of knowledge, and this can cost them a lot of money. Insurance companies, however, are reluctant to share certain information with policyholders because they need premium payments.

In the article below, we look at six car insurance secrets your insurer won’t tell you but it can greatly reduce the cost of your policy.

The Make and Model of Your Car Are the Main Factors

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The model of your car is the main factor in determining your insurance premium. Insuring an expensive car is costlier than insuring a cheaper one. Your car insurance provider will probably not bother to tell you that there is a car rating system for every make and model.

Repairing damages to a BMW is more expensive than repairing damage to a TATA nano. The year the car was manufactured is important because it affects the value of its parts as well as the amount of depreciation.

If Your Credit is Good, You’ll Pay Less

Most insurers will run a credit report on you. Insurance companies know that you will be more stable if you maintain a high credit score and pay on time for a while. These details are used to build your insurance score, which is a factor that affects your car insurance premium.

For this reason, you should always consult with an experienced local broker. If, for instance, you live in the Ontario area, make sure you contact a reputable broker who can help you find the best car insurance quote in Ontario. They can also answer any questions you might have regarding auto insurance and will explain how exactly a higher credit score may decrease your car insurance rate.

You’ll Face Consequences for Reckless Driving

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It may surprise you that insurers don’t give the greatest weight to factors such as your driving record when calculating premiums. It’s still a vital piece of information that insurers use to determine your driving habits and provide a fair quote.

It is reasonable to assume that if you have a record of traffic convictions (no matter how minor), you will be able to commit similar offenses again in the future. A traffic ticket can be used to predict the likelihood of an insurance claim. It will also result in a rise in premiums for three years. Your insurance rates may also increase for up to 6 years if there are at-fault claims on your driving record.

Your Car’s Value May Drop Significantly After Doing Repairs

Even if a car is completely repaired, its value will be significantly reduced if it has been in an accident. You may lose money even if your insurer pays to repair your car because its value has decreased. However, some insurance companies don’t allow you to claim diminished value. Check your insurance policy to see if you have this option.

In addition, attention must be paid to the components that are put in your vehicle. It is possible that your insurer will prefer to use salvage or generic parts instead of new parts purchased from the dealer. Keep in mind though that the use of old parts can further reduce the value of your vehicle.

You May Have to Pay for Expenses You Didn’t Expect

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Insurance companies usually have a limit on what they will cover for expenses such as rental cars, storage, towing, etc. Asking is the only way to be sure of what you’ll have to pay. Keep all receipts in case they can be reimbursed.

Insurance companies will always try to do the least amount of work possible in order to minimize their costs. It doesn’t mean they will always do a bad job or cut corners, but they may not be as forthcoming with information that could help you save money on claims. It’s important to protect yourself by doing as much research independently as you can after an accident and finding an insurer that has your best interest at heart.

The Area You Live in Affects Your Premium

There are more insurance claims in some cities and towns than in others. If you live in an area where there are more car insurance claims, expect that you’ll be paying a higher premium.

Some have criticized the use of postcode discrimination in determining car insurance rates. Some people suggest that personal driving records in a particular region should be used to predict claim payments. This will still affect your insurance premium, and no matter whether or not the law is amended to reflect the real cost of this component, it is yet to be determined.

If you have recently moved or plan to do so in the future, research insurance quotes in your new area of living so you can secure the lowest cost possible. If your new postal code hasn’t seen many claims, a provider with fewer claims may be able to offer you a lower premium.

Final Thoughts

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Car insurance is one of the biggest expenses we face. Even though we rarely use our coverage, the premiums still go up every year. Since there are some things that insurance companies won’t share with you, it’s important to discover some of their secrets so you can have a leg up in the industry and keep your rates slightly lower.