Car insurance is something that is mandated by law. It is also something that offers financial safety in case of theft or accident. In the instance of something happening to the car, the owner only has to pay the deductible to the car insurance company and the rest is taken care of by them.
When people are trying to reduce the overall expenditure associated with their car, then the first option that they need to look at is the car insurance policy. There are many providers of auto insurance in the market; a quick scan of the insurance companies available will make you realize that you may be spending a lot more every year in auto insurance than is necessary.
Getting the best car insurance rates
Discussed below are some steps that you can take to get the best rates for car insurance.
- Select a plan with a high deductible: The monthly car insurance payment tends to be low when the deductible is high. This aspect however has to be used carefully because of the fact that you will need to provide a big amount upfront in case you have to use the auto insurance at any point in time.
- Ensure a good credit score: The credit score is taken into account in some states at the time of offering a quote for car insurance. The better the credit, the more affordable will be the auto insurance policies.
- It is a well-known fact that the credit score has an impact on an individual’s capacity to avail a personal loan or a mortgage. But as stated above, the auto insurance rate also gets affected by the credit score in some states. Thus, varied things that adversely affect the credit score, such as high balances on credit cards, non-payment of bills, loan defaults, maxing of credit cards, bankruptcy filings, and/or old loans in collections, etc., all can prevent you from getting a good auto insurance rate.
- The car insurance score and credit score are different things, but both can impact the insurance rate. The credit score is a reflection of an individual’s creditworthiness and is used as a scale to predict the chances of the individual defaulting on his/her commitments. Also called an insurance credit score, the insurance score is different in the sense that it helps predict the likelihood of the insured filing a claim at a later date.
- It is a good thing to have good credit. A great credit score can help people save lots of money when taking out a car insurance policy.
Relevant permissions: As per the federal FCRA/Fair Credit Reporting Act, insurance providers have something known as permissible purpose which allows them to get access to the credit information of a possible future customer without taking the permission of that customer. However, the customer also has rights as mentioned below:
- The customer has the right to get access to the same data that the insurance companies get access to and see.
- The customer has the right to get a notification about the ability of an insurance provider to gain access to the personal information and/or the credit report of the customer. It is important to note that customers have the right to get a notification about the access to credit report and that the providers do not have to ask for consent for getting the access.
- The customer has the right to ask for corrections if any errors are detected in the credit report.
- Compare and shop around for car insurance providers: In order to get the best quotes for car insurance, car owners need to check out different insurance companies and compare the rates offered by each of them. When shopping around for car insurance, it is vital to remember that the rates of auto insurance vary between states.