Insurance: A Guide for the Masses

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Is a Ticket or Accident Causing Your Auto Insurance Premiums to Rise?

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Insurance companies who offer coverage for automobile insurance policies routinely use information from the driving records of their customers to determine the level of risk they may incur when providing coverage. Policyholders who receive traffic tickets or who are found to be at fault in traffic accidents are perceived as being riskier to insure. When the insurance company receives updated information about the traffic ticket or the involvement in a vehicular accident, their response is often to notify the policyholder that their premium policy renewal costs are being increased. 

If you have just received this type of notification from your car insurance provider, here are three important questions to ask your insurance broker or agent. 

1. Would attending a traffic school help lower your car insurance costs? 

If the increase in your insurance premium is related to a traffic ticket, some insurance companies view a successful completion of a qualified traffic school or class as beneficial. This shows that you're less of a risk, so insurance providers may be willing to lower insurance premium costs. Some insurance companies also offer drivers an opportunity to use monitoring equipment in their cars and offer reduced rates to drivers who agree. 

2. Would driving a different vehicle help reduce car insurance costs? 

Drivers with increasing car insurance premiums should also ask their insurance provider if driving a different car could help them enjoy lower coverage costs. A good example of a situation where this could be effective is when the driver replaces a newer or high-performance vehicle with an older or mid-range vehicle that offers better safety ratings and lower risk factors for the insurance provider. 

3. Would increasing the deductible amount help offset the cost of the premium increase? 

Another good question to ask your car insurance provider when trying to offset a premium increase due to an accident or ticket is whether it would be helpful to raise the deductible amount on your policy. Most insurance companies routinely offer lower premiums on policies with higher deductibles, so this could be a good option for offsetting cost increases after a ticket or accident. Drivers who plan to pursue this option should, however, ensure that they have savings sufficient to cover the higher deductible amount, in case they are involved in a later accident. 

Most insurance companies will consider these or other options to help their policyholders offset rising car insurance costs. Drivers who find that their current auto insurance provider is unwilling to help them find a way to reduce their premiums may want to consider discussing their situation and needs with competing auto insurance providers.