Understanding Insurance Policies

Long-Term Strategies For Low Insurance Rates

26 October 2016

Samantha Reynolds

There are many strategies you can employ to lower your car insurance rates; some work best in the short-term while others are suitable for long-term success. For example, reducing your coverage may work in the short-term, but this isn't good as a long-term strategy since you may not be adequately covered, especially if your circumstances change. Here are some of the strategies to adopt if you want to enjoy low insurance rates for a long time:

Choose an Insurance-Friendly Car

Since some cars are cheaper to insure than others, it makes sense to opt for these insurance-friendly cars since you will reap the benefits of low insurance rates for the whole life of the car. Do your research well and buy an insurance-friendly car. Here are some of the characteristics of such a car:

1. They are not built for high performance or racing. High-performance or race cars attract high rates because insurers believe they are more likely to get involved in accidents. So a Lamborghini Gallardo (horsepower over 500), for example, would attract higher rates than a Toyota Yaris (horsepower 106).
2. They are cheap to repair or replace – Cars that are complicated to repair or that have rare parts are expensive to insure since they command high repair costs.
3. They are not thief-magnets – The most stolen cars are also costly to insure since there is a high risk the insurer will be replacing it in the course of its life.

Be a Good Driver

A good driver obeys all traffic laws and goes out of their way to avoid road accidents, even minor ones. Being a good driver will give you a good driving history, and there is nothing that car insurers love more than a motorist with a clean driving history. Keep it up for a few years, and you may even get discounts for your clean driving history.

Always Carry Insurance

Another long-term strategy is to ensure that you always have auto insurance coverage, even if it's only minimum coverage. Insurers tend to be suspicious of gaps in coverage because coverage usually doesn't lapse for positive reasons. Maybe your license was canceled, your policy was canceled, or you failed to to pay your premium.

Build a Good Credit Rating

The last strategy is to build a solid credit history. Many insurance companies use credit scores as a factor, and a major one at that, in calculating insurance rates. This is because motorists with good credit are less likely to engage in reckless behaviors. It takes time to build good credit, but the benefits are also long-lasting as long as you maintain your good credit.

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