There’s a fundamental rule about car insurance that’s important to know: your driving record can affect your rates. Which can be a good thing…or a bad thing. You might have hoped that that speeding ticket or minor (it was a scratch on the other person’s car!) fender bender wouldn’t come back to haunt you, but the truth is that it definitely could. The safer a driver you are, the better your car insurance rates are likely to be. Why and how does that happen? We’ll explain.
4 ways you can save money on your car insurance by driving safe.
1. Insurance companies look at your driving record.
The thing is that insurance companies don’t like to leave things to chance. At all. They want to know how much of a risk you are to insure – in other words, how likely you are to file a claim. To do that, they’ll look at your driving record for the past three to five years when you’re getting car insurance.
(A reminder, your driving record shows your driving history. It includes things like tickets, traffic violations, accidents, license suspensions, and so on.)
As we said, the reason that insurance companies look at your driving history is that it gives an idea of how risky it would be to insure you. To them, a driver who has tickets and accidents is more of a risk to take on as an insured.
And to the insurance company, that doesn’t inspire confidence that you’re a safe driver who won’t cause them any trouble. (They like low-maintenance clients.) Therefore, the cleaner your driving record, the better your case for lower insurance rates.
And that’s the first reason to drive safe.
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2. You could get a discount if you go a certain amount of time without an accident.
Insurance companies love safe driving – and a nice, squeaky clean driving record. If you go a certain amount of time without having an accident, you could be eligible for a discount. That’s because you’ve been without a claim and you haven’t had to ask the insurance company for money.
Don’t underestimate the power of car insurance discounts. They can be very effective at helping you save money on your insurance. Ask your agent about the discounts they can offer and make sure you’re taking advantage of all the discounts that you’re eligible for.
3. You could be eligible for accident forgiveness.
Your insurance company may have an accident forgiveness program, meaning they would forgive your first at-fault accident if you’ve gone a certain amount of time without an accident on your record. (It may only apply to certain at-fault accidents.) Anyways, the perk of an accident forgiveness program is that your rates wouldn’t go up for the first “forgivable” accident you have. Your auto insurance premium wouldn’t be affected.
Anyways, it’s worth checking out your insurance carrier’s accident forgiveness program to see how you can qualify. If your carrier does indeed have accident forgiveness, it definitely pays to drive safely so that in the unfortunate circumstance that you do have an at-fault accident, it won’t hurt your rates.
4. You might be able to shrink your deductible.
Depending on your insurance carrier, you might be able to lower your deductible for each year that you go without a ticket or accident.
A brief definition:
Your deductible is the amount of money that you agree to pay if you have a claim. Essentially, you have your chunk of the claim/loss and your insurance company has theirs. So, if you have an accident causing $3,000 of damage and your deductible is $1,000, you would pay $1,000 and the insurance company pays $2,000.
So, you can see how being able to get a lower deductible can be to your benefit! Find out if this is something your insurance company offers and how you can qualify.
So, safe driving is obviously important so you don’t hurt others or yourself in an accident. But it can literally pay off in lower insurance rates. As we said, insurance companies aren’t big fans of risk, so if you can show them that you’re the opposite of a risky driver you could really see lower auto insurance rates. Anyways, drive safe out there – don’t text and drive, don’t speed, and follow the law!
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