Do Auto Insurance Premiums Increase Each Year?
It would be impossible not to notice it, but the fact is that auto insurance premiums really do increase every year. Some people may not find this surprising at all, considering how practically all the different goods and services are getting more and more expensive. In fact, studies show that insurance premiums increased a staggering 70% over the course of few years. However, what most individuals don't realize is that there is more to this phenomenon than just the current economy.
Even insurance companies are feeling the brunt of the economy, causing them to rethink their policies. Insurance companies today find themselves paying more and more for every claim, thus forcing them to adjust their standards. This doesn't just happen with one company but is an industry phenomena, affecting practically all insurance providers.
Rising Medical Cost
This might be the biggest factor that's affecting insurance premiums. The fact is that people today are incredibly aware of the dangers and go beyond their means to be safe while on the road. Even cars today are specially created to promote safety in drivers. However, the cost of medicine and hospitalizations today are on the rise. Hence, minor injuries could literally amount to a medical bill of at least several hundred dollars, forcing insurance companies to pay more for something that used to be inconsequential.
Old and New Cars
The type of car a person drives around also has a significant effect on insurance premiums. See, old cars usually means that it has gone through a lot and is carrying less than perfect parts. If this is the case, then they are more likely to breakdown or have problems, resulting to insurance claims. Hence, companies typically see old cars as risky and would impose higher insurance premiums to the individual. Unfortunately, the same goes for newer cars – especially for the more expensive ones. Expensive cars usually translate to expensive parts which means that companies would need to pay more for a single repair.
Insurance Holder's Age
Unfortunately, there's nothing a person could do about this. The good news is that the age factor is typically works on the person's favor. By the time a person hits the age of 25, their insurance premiums would have already decreased. The reason for this is simple – older individuals tend to be more careful with their driving. Speeding and drunk driving are typically attributed to the younger generation as determined by car insurance companies.
Of course, those aren't the only possible reasons why auto insurance premiums are rising. Changes in the needs of the insurance holder could also cause a domino effect in the system. For example, adding a teenager under the policy could spike up the costs, especially if the teenager happens to be male. For best results, individuals are advised to browse through policies and talk to their insurance providers about possible perks or changes that could be done to lower costs.
How to Get Cheap Auto Insurance Premiums
Getting cheap auto insurance premiums is not as tough as most people would think. All it takes is thorough research to find affordable policies that still provide adequate coverage. Some tips on how to lower auto insurance premiums include:
– Being a Better Driver – Individuals who have a good driving history are in the best position to bargain for insurance premiums. Individuals who have never made any claims could easily apply for a No Claim Bonus, significantly decreasing their premiums during renewal.
– Good Credit Report – contrary to popular belief, credit reports still have an effect on a person's auto insurance premium. It's not as significant as opposed to loans, but it does bear some weight for insurance companies. Hence, those who want to lower their premiums are advised to be careful with their credit score. Make sure to pay off any of your outstanding debts or overdue loans to create a better report. Ordering a report and studying it for inaccuracies would also be a good idea.
– Good Car Maintenance – Safety alarms and finding a good parking spot for the car are also determining factors for premiums. Individuals who manage to show insurance companies their carefulness are more likely to enjoy better premiums as well. Again, this is due to the fact that companies see them as a lesser risk.
To wrap it up - yes, auto insurance premiums do experience an increase in price every year. However, that doesn't mean that individuals should just take this sitting down. Take the time to peruse different policies and find out exactly what factors can be manipulated to achieve cheaper premiums. With patience, it is perfectly possible to get excellent results without paying too much for the privilege.