Auto Insurance Premiums 101

Understanding what insurers look at when they calculate auto insurance premiums can help drivers find ways to save on their insurance costs. Here are the most common factors affecting premiums:

• Discounts – There are many discounts available to insurance buyers. Examples might be receiving a discount due to being a member of an association, occupational, packaging your home and auto with the same carrier, etc.  We are able to offer most COA members up to a 15% discount on their premiums. 
• Driving experience – In California, you must have three (3) consecutive years of clean driving history to qualify for the California Good Driver discount (which is typically around 25%). On the opposite side, those with less than three years of driving experience (such as young drivers) will receive a higher premium. 
• Your driving record – Expect to see a premium increase if you have a violation or accident. You will be surcharged for each incident, however, if you have two or more violations or accidents you will lose your California Good Driver discount (had you previously received this discount) in addition to the standard surcharges. Luckily, most violations (except major violations such as DUI, reckless driving, etc.) will only affect premiums for three years after they occur.
• The car you drive – A Porsche isn’t going to be affordable to insure since fixing it after an accident would cost much more than a typical sedan such as a Ford or Honda. Another factor to be aware of is cars that are commonly stolen (such as the Honda Civic or Toyota Camry) might also come with a higher premium. Before you purchase a car you should contact your agent and have them run a quote to help you plan and budget. 
• Your driving habits – Driving more miles or using your vehicle for business will increase your premium.  In California, the annual estimated miles driven is a big rating factor. You will want to be sure you have estimated correctly, as even 1,000 mile difference could equal hundreds of dollars in premium. Note: oil change receipts are a great tool to use for this. 
• Your coverage limits – Higher limits are often advisable (accidents are extremely expensive), but with more protection comes a higher premium.  Although this does affect your cost, being underinsured at the time of an accident will affect you much more in the long-run. You can often get a $1 Million personal liability umbrella policy for as little as $200 a year. We recommend our clients to carry a minimum liability limit of one and a half times their net assets
• Deductibles – Increasing your deductibles on comprehensive/collision coverage can save you premium.  Be careful with this as you will be responsible to pay whatever deductible you select should you be at fault for an accident and you need to repair your vehicle.

Want to explore more ways to save on auto or any other type of insurance premiums?  Contact Warren G. Bender Co. today at 916-380-5300 or coa@wgbender.com for more information.