How To Avoid A Rate Increase During Renewal

If you currently enjoy low insurance rates, you may not want to pay more at the next renewal. Take these measures between now and the renewal date to continue enjoying affordable coverage rates.

Don't Modify the Car

Modifying a car changes its value and accident risk. For example, installing an aftermarket entertainment system can increase the car's value by thousands of dollars. Raising the car to tackle off-road terrains increases its risk of rolling in an accident. Such factors increase your risk profile with the insurer. Leave the car as it is if you don't want to see a rate increase at renewal. 

Avoid Accidents

Auto insurance companies use your driving history to predict future risks and calculate your premiums. The more accidents you cause, the more your rates will rise. Too many accidents might even force your insurance company to deny you coverage.

Do your best to avoid auto accidents during the year. For example, don't drink and drive, drive while intoxicated, and ignore traffic rules. Service the car as necessary and repair malfunctions as soon as possible.

Fix Small Repairs

All claims cost your insurance company money. The expenses come in settlements, claim processing, and legal defense, depending on the claim. The more claims you make, the more your insurance company spends on you. Thus, multiple claims before your insurance renewal might see your rates rise.

Reassess your losses before filing any claim. For example, you may fix small losses out of pocket — especially those that slightly exceed the deductible. That way, you will have a clean history at policy renewal.

Manage Your Credit

Many insurance companies use your credit score in the rate calculation. The credit score consideration makes sense because your credit score mirrors your financial responsibility and ability. Maintain or raise your credit score; don't let it worsen before you renew your coverage. Pay your debts in time, don't cancel lines of credit, and keep your debt utilization low.

Don't Drive Too Much

The more you drive, the higher your risk of getting in an accident. Insurance companies use this fact to reward drivers who don't exceed a certain mileage within the same year. You may enjoy the reward as a rate discount if you keep your annual mileage low.

You can take several measures to minimize your annual driving mileage. For example, you can carpool with others, use public transport whenever possible, and use non-motorized transport for short distances.

For more info about car insurance quotes, contact a local company.