Saving on car insurance is a top priority for most drivers, but you should beware that the cheapest policy does not always guarantee complete protection for your vehicle. By understanding what factors influence your auto insurance premium, it is easier to lower your insurance rate and get good coverage without having to break the bank.

“Insurance rates are based on risk.”

Why do some drivers pay less for their car insurance than others? The answer to this question may vary depending on certain situations, but the simplest is that some drivers represent less risk for insurance companies than others. If your insurance rate is higher, it is mainly because you or your car imply a greater risk for your insurance company. 


Here are some of the factors that influence your insurance premium and how they can help you lower your rate.


1. Maintain a clean driving record. 

Although this may sound obvious, being a safe driver is the best way to keep premiums under control. Being a safe driver and staying with the same driver for several consecutive years will grant a driver access to special discounts. Insurance rates are based on risk, so avoiding traffic violations, like speeding, ignoring signs and red lights or DUI/DWI is very important. Accumulating too many traffic violations may lead the insurer to cancel current and future bonuses.


2. Be honest when declaring the main driver

When applying for car insurance, some people assign a more experienced person as the main driver to avoid increasing their premium. This is called "fronting," and it is considered a fraud. If this is discovered (usually after a claim), the insurance company will decline the claim and will begin a thorough investigation. The fraud will be recorded and any insurance company will know about the incident.

3. Increase deductibles

Deductibles represent the amount of money you must pay before making an insurance claim. The higher the deductible, the cheaper the insurance. For example, if you increase your deductible from $ 200 to $ 500, you will reduce the annual insurance cost from 15% to 30%. A thousand dollar deductible can save you up to 40% on the insurance premium.


4. Improve your credit score

Insurance companies use credit score as a rating factor influencing your car insurance premium. While the use of credit history varies from company to company and different states, it is an evaluation instrument that allows the insurer to rate the candidates to ensure them in a uniform and objective manner. In fact, drivers with a long-established credit history have fewer accidents than those with little credit history.


5. Bundle your insurance policies

Combining your home and auto insurance under one insurance company often gets you a solid discount. You may also receive a discount if you have several vehicles under the same policy and some companies recognize loyalty by giving discounts to their oldest customers. Bundling typically saves customers anywhere between 15-20% of their insurance premiums.


Insurance does not have to cost you a fortune and if you don’t know where to start your search our experienced team at Armstrong Insurance is here to help you get the best price for the coverage you need.