Review Your Rates Annually to Know When to Buy Auto Insurance

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Things to Remember...
  • When you annually renew your auto insurance policy, make sure you check to see if you have the best deal still
  • A number of factors both personally and economically can affect your auto insurance rates
  • Choose the best insurance policy based not just on price but on the amount of coverage you need

There are certain factors to look for in your policy details, driving history and record and the insurance market that will cue you when it may be a good time to buy a new auto insurance policy.

Read on to learn the tricks that can get you a lower rate on your auto insurance.

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Why It’s a Good Idea to Look into Your Insurance Rates Annually

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Once you have a car insurance policy established, it is likely to automatically renew every year. This provides a convenience for both the consumer and the auto insurer.

You don’t have to go through the hassle of renewing your insurance, and the insurer is less likely to lose their customer to a competitor.

However, allowing your auto insurance to automatically renew can prevent you from getting the best available rate.

Most people don’t want to go out and look for another insurance company, and insurers count on this.

Your insurance company will not offer you special incentives or the best discounts when you automatically renew. More likely, they will simply “re-up” your existing policy.

This could mean you’re missing out on all kinds of special features, benefits, and discounts!

Auto insurers also don’t usually go into depth refreshing your personal information when they renew your policy.

You may have had changes in your personal information or driving record that could lead to a lower rate. However, your current insurer may not be capturing this rate.

Finally, the auto insurance market is subject to great fluctuations. Auto insurance rates go up and down frequently based on competition in the market.

Your Personal Factors That Can Influence Your Car Insurance Rates

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Many Americans assume that there is not much that can happen from year to year to change their insurance rates. That’s simply not true!

In fact, several factors in your personal information alone may be able to help you get a lower rate if updated.

If you have not had any collisions, speeding citations, or other negative reports on your driving record, you are likely eligible for a rate reduction.

This is especially true if you are in your teens or twenties. During these years, your risk of a claim or an accident decreases significantly with each year of safe driving experience you accrue.

Insurance companies reward you for this reduced risk with lower rates.

If you have moved, you may also be eligible for a lower rate. The risk of vehicle theft or damage is largely determined by where your car is parked at night.

If you’ve relocated to a safer area or started to garage your vehicle recently, you should make sure that your insurer is giving you credit.

Further, the number of miles that you drive can make you eligible for an insurance reduction. Perhaps you started carpooling or changed to a job that is closer to home.

By reporting your average mileage to your insurer, you may be able to negotiate a lower rate. Insurers consider vehicles that are on the road less frequently to be at a statistically lower risk of accident, which results in a lower premium.

Other factors such as the age of your vehicle can also impact your rates. As your vehicle ages, its replacement value drops, and that could lead to a lower premium.

To learn about even more factors that could potentially impact your car insurance rates, check out this list published by AOL.

Market Factors That Can Influence Your Car Insurance Rates

Even if all of your personal factors have remained the same since you last renewed your policy, you may still be eligible for a lower rate.

Many factors in the market influence auto insurance rates.

Average premiums may rise and lower over time based upon new statistical information that is released or new players and competition in the auto insurance industry.

Benchmarking your current rate against other auto insurance providers each year may help provide you with an understanding of the direction of the auto insurance market.

State regulation is also impacting the auto insurance market all over the country.

Some states, such as California, currently impose regulations on this industry and other states are rapidly following suit.

Increased auto insurance regulations in your state can mean major changes in your premium rates.

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What to Look for From Your Insurer

When you re-evaluate your auto insurance policy annually, you will want to review any updates from your current insurer.

Read their annual statement carefully and look for things that will affect you, such as a change in the way they calculate their premiums or new payment options that are available.

In addition, take a close look at your current provider’s financial health. Check their stock prices, if applicable, and read their annual report.

A company that is facing financial trouble or is overextended may not be your best bet for getting the lowest rates on auto insurance.

You will also want to explore new discounts and promotional opportunities that are available from your current insurer.

For example, many insurers are now offering reduced deductibles to safe drivers or special discounts to students who maintain high grades.

Compare your current policy with your insurer’s latest discounts and opportunities to see if there are any new features available, in which you can take advantage.

Finding Competitive Insurance Quotes

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However, you don’t want to limit your annual rate review to only your current insurer.

Be sure that you are also looking for competitive rates from other companies and consider switching insurance providers if you can get a comparable policy at a lower price.

To find out about potential companies, be sure to check out an independent consumer review board such as A.M. Best or J.D Power and Associates.

These sites provide comprehensive data about consumer satisfaction with price, service, and features of many different insurers.

You will also want to ensure that you are paying attention to the specifics of the policies being offered, not just the rate.

Look for special discounts or benefits that fit your insurance needs, as well as conveniences like attractive payment plans or local customer service.

Negotiating With Your Current Insurer

Once you have a handle on the updated offerings available from your current insurer as well as what policies and premiums are available elsewhere, you are ready to negotiate with your insurer.

Gather together all of your information and research and choose a time to call your insurance company, but be ready to spend some time on the phone.

You can start by telling your insurer that you are looking at other policies and you’d like to know the best they can offer you before you make your decision.

Many companies will put extra effort into trying to keep an existing customer, and they may offer you special discounts or features.

If you are still not satisfied with what your insurer is offering, describe the particular details of the competitive plans that you find attractive.

This could be a lower rate, more flexible payment terms, or a special feature. Offer your insurer the opportunity to match these features to keep your business.

Choosing the Best Quote for Your Needs and Budget

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If your insurer isn’t budging or if you are overall unhappy with the quality and service of your current policy, it may be time to switch to one of the competitive insurers that you received a quote from.

When evaluating insurers, many people make the mistake of focusing solely on price and going with the lowest cost provider.

While price is certainly important, you want to make sure that you make a holistic decision about your insurance needs. 

Besides price, you will want to consider customer service, the percentage of claims fulfilled, plan quality, and other features and benefits offered by the insurer.

Armed with this information from your research and negotiation, you should be able to make an educated decision on the right insurance policy for you.

It may take a little bit of effort, but reviewing your auto insurance rates annually can end up saving you a bundle in the long run!

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