For many of us, car insurance can be a quite simple and straightforward matter. You find an insurance company, you pay the premiums every month, forget about it and continue with your day to day life. Unfortunately, it isn’t as simple as that, and there are several car insurance facts that every policy owner should know in order to have a better understanding of how their policy works. These facts include the impact of credit history, the price of brand loyalty, failing to cancel a policy, when a company can cancel a policy, and how payment installments work.
Credit History Can Impact Insurance Rates
One of the most important car insurance facts every policy owner should know is that their credit history can actually have an impact on the insurance rates they must pay. There are many variables that insurance companies take into account when assessing an individual for a policy. Credit scores help insurance companies determine how likely an individual is of having an insurance claim. They also consider age driving record, claims history, place of residence, type of car, and average miles they drive.
Brand Loyalty Can Become Expensive
For many car owners, finding auto insurance is a straightforward manner that only requires them to find a company they like and keep making the payments every month. However, some companies might take advantage of that when automatically renewing insurance policies. Instead of letting them raise your rates once a year, remember to shop around at least once a year to make sure you are getting a fair rate.
Failing to Cancel a Policy Will Cost You
Another common problem that many policy owners might face is forgetting to cancel a policy once it expires or when they switch providers. One of the most relevant car insurance facts you should be aware of is that stopping payment on your current policy will indeed cancel your policy. However, this will not look good for you, and your insurance company might report this to the credit bureaus, which will damage your credit score without a doubt.
Your Provider Can Cancel Your Policy at Any Time
We need to be careful and always review all the details of our car insurance policy whenever we purchase or renew it. It is common for insurance companies to cancel a policy at any time if you fail to comply with any of their requirements. This can happen if we, for example, lost our driver’s license, failed to pay our premium on time, submitted too many at-fault claims, or misrepresenting our driving history. If this ever happened, though, our company should notify us in written.
Payment Installments Generate Extra Charges
Last but not least, one of the most useful car insurance facts that every policy owner should know is that paying our premiums in monthly installments could generate extra charges. This is because most insurance companies charge administrative fees when they break up premium payments into smaller installments. Therefore, we might end up saving money when we pay our car insurance premium in full.