Ever wonder how or why certain changes to your auto insurance policy affect your premium? Everyone knows that getting into an accident or a new ticket can up your premium, but even small changes can increase or decrease your rate, and we’re here to let you know what those changes are, and what things you can do to keep your premium as low as possible.
Moving – Depending on where you move to, your new address can either increase or decrease your premium. Certain areas can jack up the cost of your policy depending on a few different factors; if the town that you move to has a high level of accidents that occur, that will increase your premium. If there is a high crime rate (vandalism and robbery especially) in the town or if it is highly populated with licensed drivers, that can increase your premium. All of these factors put drivers at a higher risk for accidents and therefore claims against the insurance company, which is why they will up the cost in areas where those incidents are more common. However, if you move to a small town with a low population and crime rate, your premium will likely go down.
Payment Plan – The type of payment plan you’re on can have a bigger affect on your premium than you would think. Going green and signing up for electronic payments not only gets you a discount, but there is typically either no service fee or if there is it is $1.00. For those that are on bill by mail payment plans, they receive no discount and are charged an additional service fee every time a payment is made, this fee typically ranges from $5.00-$7.00 but varies by carrier.
Payment History – Think you can get away with late payments over and over? Think again! Paying your insurance on time can only help your cause, but if you continuously make late payments or are pending cancellation, be prepared for an increase in your premium when your renewal comes around. Your payment history is a rating factor when your policy comes up for renewal, so be sure to make any and all payments right on time to ensure the lowest possible price. If possible, try to pay in full because you will also get an additional discount for that.
Deductible – Your deductible can either increase or decrease your premium depending on how much you want to pay out of pocket in the case of an accident. If you’re willing to increase your deductibles, you can typically expect to see your monthly payments drop. The more you are willing to pay in the event of an accident, the less the insurance company will have to pay. Obviously this is a lot more appealing to carriers so they will usually reduce your monthly bills. If you reduce your deductible, the insurance company will have to pay more out of their pocket should you get into an accident, so your monthly bill will be more expensive. It all depends on how much money you would be able to spend if your car was damaged, if you can pay a high amount up front, it will cost you less in the long run premium wise. If you can’t afford to pay a large deductible up front in the case of an incident, you may be better off with the lower deductible but higher monthly payment. If you are an experienced driver with a good record, going for the higher deductible might be a better option. If you never get into an accident, the deductible will never come into play but you’ll still benefit from the reduced monthly premium. The only thing that could prevent your premium from going down even if you increase your deductibles is if you have a multiple points on your record and are considered to be high risk by insurance carriers.
Adding Drivers – This goes without saying, the more drivers on your policy, the more expensive it will be. What you need to keep in mind though is that adding YOUNG drivers is especially expensive. Parents, be prepared for your policy to increase by hundreds of dollars once you add on your new driver(s)!
Adding/Replacing a Vehicle – If you’re adding a vehicle onto your policy, it is definitely going to increase the premium. However, replacing a vehicle can go either way, depending on the cars themselves. Older cars are less expensive to insure, so if you’re replacing your 2010 Honda Accord with the 2002 model, your premium will likely decrease.
These are only a few of the potential changes that can be made to auto policies. While we can’t gurantee the above statements, they are the likely results of such changes unless there are extenuating circumstances. Be sure to alert your insurance agency or carrier about any changes being made, even if they won’t affect your premium. Contact information is one of the most important changes of all, so if you get a new phone number or email address be sure to update it with your agency or carrier as soon as possible! Keeping your insurance company informed and up to date will only benefit you in the long run!
Safety is number one in a parents mind when it comes to their child, and learning to drive can be risky business. Peace of mind however may be just around the corner thanks to a recent experiment completed by the University of Massachusetts Amherst. The new study’s found young drivers can be trained to realize and avoid dangerous situations while driving and reduce their risk of accidents.
Researchers at the University developed and evaluated a computer based training program training young drivers how to better anticipate potential hazards on the road. Twenty-four drivers ages eighteen to twenty-one were surveyed in the study. Before any on-road driving twelve of the drivers took part in a Risk Awareness and Perception Training Program developed at the University of Massachusetts. The simulation program contains nine driving scenarios with a potential risk of an accident with another vehicle or pedestrian. The other twelve drivers did not participate in the training.
After the training was complete, researchers followed the participants eye movements driving a total of 16 miles on local roads. Prior to the drive the researchers found parts of the drive that contained hazards similar and dissimilar to those in the simulation. The driving experiment found the drivers who participated in the driving simulation and training were significantly more likely to recognize areas of the roads with potential risks. Those with training recorded eye movements recognizing a 64.4% likelihood to view at areas of the roads with potential hazards as only 37.4% without the training readily viewed these areas of the road.
According to an article by EHS Today the researchers include: Anuj K. Pradhan, Ph.D., and Donald L. Fisher, Ph.D., of the Department of Mechanical and Industrial Engineering; Alexander Pollatsek, Ph.D., of the Department of Psychology; and Michael Knodler, Ph.D., of the Department of Civil and Environmental Engineering.
As of now a total of 42 states allow teenagers under 16 years to earn a learners permit. Of these states, seven offer permits to fourteen-year-olds. Laws differing by state, allowing young drivers certain privileges and restrictions such as a curfew, number of passengers allowed or licensing age. Representatives Tim Bishop, Michael Castle, and Chris Van Hollen, Jr. began the push for a national standardization of driving permits and licenses April of 2009. The legislative act, dubbed the STAND UP Act, would establish minimum federal requirements for state laws and set a 3 year time frame from enactment for states to conform to the new federal standards.
The www.saferoads4teens.org, website dedicated to this piece of legislation, gives an overview of the STANDUP ACT as follows:
States must meet the following requirements under the STANDUP Act:
Three stages of licensing – learner’s permit, intermediate stage, and full licensure – should be used
Age 16 should be the earliest age for entry into the learner’s permit process
Nighttime driving while unsupervised should be restricted during the learner’s permit and intermediate stages, until full licensure at age 18
Driving while using communication devices (cell phone calls, texting) should be prohibited at least until full licensure at age 18
Unrestricted, full licensure should occur no earlier than age 18
Passengers should be restricted – no more than one non-familial passenger under age 21 unless a licensed driver over age 21 is in the vehicle – until full licensure at age 18
Any other requirement adopted by the Secretary of Transportation, such as a minimum duration of 6 months and a minimum of 30 hours of supervised driving for a learner’s permit, may be included
Compliance with the requirements within the first three years after enactment will make states eligible for incentive grants
Three years are provided for states to meet the requirements, after which sanctions are imposed to encourage states to meet the requirements
This is a piece of legislation to keep an eye on, although it is still in the early stages it had the potential to affect drivers across the nation. For further information and updates on the Act’s happenings please visit the safe 4 roads legislative update page.
Feel like your paying too much for car insurance? For younger or high risk drivers some feel that they are paying more towards their massachusetts car insurance that what their car is actually worth if it were to get totaled. For example if a car was valued at $2000 and the driver was paying $170 a month for full coverage, then in a calender year they would over pay by $40 the value of his or her car. There are plenty things that can lead up to a high monthly premium for a lesser valued car such as the driver having many traffic violations.