Car insurance can seem simple on the surface, but if you dig a little deeper you’ll realize that there’s a world of complexity within.
This matters a lot if you either need to make a claim, or you want to lower the price of your premium rather than paying over the odds unnecessarily.
With that in mind, here are some interesting facts about car insurance that will make you much savvier when you need to buy your next policy.
You should consider switching if your credit score has changed
Improving your credit score is sensible for all sorts of reasons, and one of the perks that it provides is the opportunity to get a better deal on your car insurance via sites like Cheapinsurance.com.
This is because insurers in most states, excluding California, will take your credit score into account when working out what to charge you. Studies have shown that people with better credit scores tend to be safer drivers, and hence represent less of a risk for car insurance providers.
Of course if you switch to a new provider before your policy with your current insurer has ended, you could be charged a termination fee. That means you need to be sure that the move makes financial sense, as the amount you save might not be enough to justify it.
Only two states don’t require car insurance
Having insurance is a legal necessity for car owners in most places, but Virginia and New Hampshire have a different approach to the rest of the country.
Virginian motorists can steer clear of car insurance indefinitely so long as they hand over $500 to the authorities to register their vehicle as uninsured, and New Hampshire residents face even fewer obligations.
Of course in either case this doesn’t mean that you can just drive however you like and face no consequences; you’ll be expected to pay out if you are involved in an accident and are found to be at fault. This means that most motorists in these states do have insurance coverage, because the cost of not being protected is far too high.
Repair costs matter most
You might think that newer cars with higher sticker prices are going to be more expensive to insure than older vehicles. However, this is not always the case, and in fact insurers will look into the expense of repairing a car more closely than lots of other factors.
This means that if you have an older, rarer car which is harder to get parts for and which there are fewer specialists capable of maintaining and fixing it up, it could cost more to insure than a new, common model.
Things like engine power and value obviously come into play as well, but the main takeaway is that deliberately driving an older vehicle with a view to getting cheaper insurance isn’t always going to work out for you.
Perks could be important
Most people compare car insurance policies based on the level of cover provided. This is all well and good, and you could make savings if you choose a barebones policy without any bells or whistles.
However, it’s often worth it to pay a little extra for a package that includes built-in perks. For example, lots of insurers now offer breakdown cover as part of their bundles, and you may even get a discount on your next policy if you stay loyal to a given company for a fixed amount of time.
Weighing up your options and reading the small print will let you get the right car insurance policy for you, at a price you can afford.