What Can Raise Car Insurance Premiums?
Car insurance premiums fluctuate for an array of reasons. External factors, such as where you live, and the number of accidents in the area, can easily affect the overall insurance program when rates are reviewed by the insurance company. Still, internal factors, such as driving history and vehicle usage, have a much greater impact on increased insurance premiums and can, at times, be controlled by the policyholder.
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Vehicle Changes
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The type of vehicle you drive has a large impact on the auto policy's premium. If you make a vehicle change from a low- to moderate-risk vehicle, like a sedan, into a higher risk vehicle, such as a sports utility vehicle, the policy premium will increase to reflect the increased risk.
Coverage Changes
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Increasing coverage levels and adding on new coverages will absolutely increase the auto policy's premium, though the impact may be minimal. Reducing physical damage coverage, or comprehensive and collision, and deductibles, will also increase the premium, since the insurance company takes on a greater financial risk, while the policyholder reduces risk.
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Driving History
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Each driver's driving and accident history has a direct impact on the auto policy's premium. The insurance carrier verifies the driver activity and makes necessary corrections during the first 45 to 60 days of the newly purchased policy. If the driving activity listed on the policy is found to be inaccurate or incomplete, the insurance carrier updates the information and adjusts the premium accordingly. Misrepresented and omitted driving activity is added to the policy, and the premium is often increased as a result. Additional violations, and accidents that occur after the underwriting period is over, are reflected in the renewing policy, which may also reflect an increase in premium.
Considerations
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Other factors that can change the premium of an auto policy are the number of miles driven, the driver's occupation, number of years of driving experience, credit rating and available discounts. While some items can be changed relatively quickly, such as improving the credit score, other aspects only improve in time, such as the driver's experience. Discounts are always helpful in reducing premium increases. Insurance carriers often offer discounts for activities such as completing a driver, or accident, prevention course, and installing vehicle theft devices on the vehicle. Discounts options also include multi-vehicle, multi-policy and safe driver.
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