With car insurance rates changing on a daily basis; how often should you compare rates from different insurance companies to ensure you are paying the lowest prices? The task may not be fun, but mobile phones and access to the internet has made comparing insurance quotes much faster and easier.
Having car insurance protects drivers financially just in case you happen to be at fault during an auto accident. But paying monthly premiums can make you feel that insurance companies are not in the business of saving you money.
Unfortunately, you cannot avoid paying car insurance, but you do have a choice in how much you want to pay for coverage. Shopping for car insurance every 6 months will give you the best chance at paying the lowest price available on the market.
Arizona State Insurance Requirements
All states have different legal requirements for liability, personal injury protection and full coverage. For example, drivers in Arizona are legally required to have a minimum of $15,000 for bodily injury/death to one person, $30,000 for bodily injury/death to more than one person, and $10,000 for damage to property.
Drivers in Arizona can also have the option to opt out of insurance if they obtain a $40,000 certificate of deposit of assigned to the Office of the Arizona State Treasurer.
All 50 states have different laws related to car insurance, but all states require some type of minimum coverage. These requirements can change whenever there is a new legislature. Always be aware of the changes so you can obtain insurance that
complies with the law.
Insurance Agencies Change Rates Daily
The price you pay for insurance premiums can change on a month to month, or even day to day basis. Car insurance providers change their rates to account for different risk factors that may occur throughout the year.
For example, if you are shopping for car insurance in the state of Arizona during the month of July, then you will be quoted higher premiums compared to the rest of the year because of monsoon season. Cars have a higher risk of being damaged in the month of July causing insurance companies to have an increase in insurance claims processed by customers. Agencies must increase their rates to cover these payouts.
The changes in car insurance quotes on a day to day basis may not be much, but the changes that can happen to premium rates over 6 months can save you up to hundreds of dollars a year. It is important to shop for car insurance quotes at least twice a year.
Be sure to remember that weather conditions, crime and home features can affect the price you pay for insurance.
Accidents, Tickets & Traffic Violations
It usually takes 3 to 5 years for a traffic violation to fall off your record. This is frightening, but it won’t affect your premium rates forever. Legally, car insurance companies cannot consider accidents and violations after a certain number of years.
Drive carefully, and remember all of your driving incidents are on record and will have an impact on the price you will pay for car insurance.
Change In Lifestyle
ATTENTION YOUNG DRIVERS: It is important for you to shop around often. Once you reach 20 years of age, your premiums drop every year until you are 60 years old. The older you get, the less you pay!
As we all know, a lot can change in a week. The following lifestyle changes can save you money on your car insurance rates:
- New Driver
- New Address
Vehicle Loses Value
Research shows that 5 year old car models on average spend 20% less on car insurance when compared to newer cars. Shopping for car insurance every month will update your discounts and coverage options to match the decreasing value of your car.
The value of brand new cars drop by 40% within the first year of ownership. Depreciation continues throughout the lifespan of the vehicle, whether you purchased it used or new.
It will be ridiculous to pay the same insurance rate every year for a car that has less value than when you originally purchased it.
Maintained Coverage For Over 6 months
Once you have car insurance for over 6 months, you are considered a low risk driver and have access to additional coverage and loyalty discounts. When you don’t have a strong history coverage, insurance companies see you as a high risk.
Car insurance is usually slightly more expensive for drivers who have had a lapse in coverage for a long period of time. Because there is no record on you making payments on time or the number of claims you make, insurance companies are prepared for the worse.
It is simple as this: “New” customers are quoted with lower rates. Why? According to insurance companies, it is a quick and easy way to get them in the door. By simply requesting a quote every 6 months with your current provider makes you a “new” customer. This can save you an average of $50 on your policy.
Although many disagree with an insurance company’s ability to ask for credit scores because it is seen as discriminatory, many agencies do it anyway. Estimates show that drivers with poor credit scores pay an average of $214 more per year for coverage than drivers with good credit.
Research from the McCombs School at the University of Texas shows a correlation between your credit score and how likely you are to file a claim or be at fault in a car accident. Insurance companies see this information as drivers with poor credit scores are financially irresponsible and quote them with higher rates.
The only states where it is illegal to consider your credit score for premium rates is California, Hawaii and Massachusetts. So if there has been a change in your credit score recently, you should test the market to see if you can get a better rate for car insurance.
Remember, Every 6 Months!
While you insurance agent should be your first source to finding cheap insurance rates, it is your responsibility to make them aware of any changes that might change your premium rates and policy needs.
Shopping for insurance every 6 months will allow you to keep track of what you are paying and will keep your insurance provider on their toes when it comes to discounts and policy recommendations.