One simple way that you can receive painless savings is to compare your auto insurance on a yearly basis. This gives you savings due to competition in the market place, but you can also create more savings by understanding how auto insurance companies view risks and what standards they use to make their calculations. If you have this information, then you can make adjustments that favor you in their calculations to lower your auto insurance bill more.
California has passed a new law on how auto insurance rates need to be calculated. While obviously this doesn’t apply to everyone in the country, what it does do is give a glimpse of what factors are important in relation to what you’re paying for car insurance. According to the Association of California Insurance Companies, auto insurance companies will now have to give more weight to the top three factors below when making their insurance calculations. This is a major change because “territory / zip-code” (where you live) was the primary factor in calculation your auto insurance rates before the law change:
1. Driving record
2. Number of miles driven
3. Years of driving experience
By looking at these, you can see some of the issues that affect your auto insurance and while many you won’t be able to change (especially right away), there are a few that you can work toward to hopefully get lower auto rates. There are also a number of other discounts that you should always ask your auto insurer about which you might qualify for (List at bottom of the page) since these may lower your insurance rates even more.
What I find interesting (and quite surprising) is that “credit score” has been left off of the California list which is a tool that has become more and more prominent when calculating all insurance rates in general including auto insurance.