It goes without saying that the less liability coverage you have, the cheaper it will be for you when it comes to your premium. That’s just simple logic. The less financial exposure the insurance company has, the cheaper the product will be. However, it is highly
recommended that the majority of the people review their own driving skills and experience before making a potentially dangerous and risky financial decision.
Liability coverage for bodily injury (physical damage to the persons in the vehicle) and property damage (damage caused to someone’s property like car or other stationary objects) vary by state in regards to what they require you to have. The more coverage you have, the more risk the insurance company is willing to take on and premiums are set to reflect that.
All of Insurance Is Based on Statistics
Your premium is based on your rating class and a slew of other variables. Each one of those variables are reviewed to better establish a statistical probability of your own risk while driving. I’ll spare you the advanced statistics lesson but know that the amount you pay for insurance is not a random number or an arbitrary amount based on whims. These companies profit based on the statistical analysis of loss they are going to face and adjust accordingly. Every company is a little different but operate pretty close to the same when it comes to factoring rates.
It’s been said all of that because there is one area that is missing, the human element. For example, for http://carinsurancenomoneydown.com/ you are a name on the screen with a bunch of different numbers. In the real world, you are (hopefully) a rational human being capable of making logical decisions.
Minimum Amount of Coverage
Many customers are only seeking the bare minimum amount of coverage the state requires to drive on their roads. State minimums are fine for seasoned drivers who have a proven track record of good driving and who pose a limited threat on the road. More often than not, the company encourage the step above the legal minimum. Here’s why:
In the state of Alabama, (at the time of this writing) the state requires bodily injury coverage to be no less than $25,000/$50,000 and property damage $25,000 in order for the driver to be able to legally drive in this state. The average bodily injury claims nationally in 2019 was somewhere around $15,800 which is well below the $25,000 dollar limit. However, that’s only an average and it means that there are quite a few claims that are significantly higher. On the property damage side, the average cost of a new car in 2019 is over $33,000 so the legal limit for property damage in this state doesn’t cover this cost in the event you total out someone’s new car.
On the Flip Side, Higher Limits Aren’t Always Better
There are customers on a regular basis who have $250,000+ in coverage and who are exceptional drivers and very responsible. They buy into the sales propaganda that they need this coverage in order to feel more financially responsible when in actuality these are the types of customers that insurance companies make a killing off of. They pay a higher premium for a product they never use, instead of adjusting the limits and saving the extra money. The only time the company recommend these higher levels of coverage is if there are teenage drivers in the household or other mitigating circumstances that warrant extra protection. Even in that situation, the company recommend a personal liability umbrella policy that often works out cheaper than having the higher limits and it protects both home and auto liability for pretty cheap.
Walk Them Through the Process
For many of the customers the company take care of, the extra few dollars to increase their liability limit to the next level makes sense for many of the customers the company have who have less than perfect driving experiences. As always, the company’s job is not to push them one way or another, but rather to educate and walk them through the process of deciding which option is best for them. Sometimes the right choice is lower coverage and if they are comfortable with that, then it is the best thing to do. However, the company does work with many who are amazing drivers who are perfectly fine with just having the bare minimum in coverage solely to be legal on the road.
Are you a great driver? Are you aware of your surroundings? Are you willing to take on the additional financial risk in the event you are in an accident that you are at fault for and insurance doesn’t cover the entire amount? If so, you may benefit from only having state minimum coverage and save some money on paying for unneeded coverage.
For the bulk of the people, https://carinsurancewithnodownpayment.com/ work with, mid-level coverage works out very well for them. More coverage isn’t always better in the long run, especially for those who are looking to get ahead financially. Save the extra $20- $50 and pay down a debt instead of giving it to an insurance company to boost the pockets of insurance agents offering.
Improve Your Credit
Probably you didn’t know that 85% of all auto insurance company’s base premiums partly on credit. The worse the credit, the more you pay.
The argument for and against both have extreme merit, but the bottom line is simple, it is an industry standard. Because someone is going through a divorce and has had credit issues, they are a worse driver and more of a risk? Not likely. However, as stated before, insurance companies only see your name on a screen, not the human element behind it. Even agents can’t fix that fact as it is out of their reach.
If you have bad credit and want a decent rate on auto insurance, the option is to buy now pay later car insurance. There are a handful of auto insurance companies that don’t check credit, but most of them are sold independently and are not as well-known as some of the bigger brands with more recognition. Always check the feedback on these companies, especially on the claims satisfaction side of the house. Insurance is insurance, what makes the difference is how they pay out claims.
Otherwise, improve your credit or fall victim to the increased premium. There is boatload of resources out there to help you rebuild your credit and many of them are free through the government. Don’t let a salesperson sell you on some magic product that will fix it for you. It comes through hard work, sacrifice, and discipline on your part.