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Elizabeth Warren : How is it possible that auto insurance premiums increase every year. How do I get a better rate?

 Compare auto insurance.

Response : Elizabeth, I am going to give you factors which are responsible for increase in auto insurance premiums. Also let me point out that the best bet for any individual is to compare auto insurance – yes, compare auto insurance just like you compare the flyer to buy a $5- $25 item every week and check out what is avaliable at Walmart, Sears, Cosco, bargain store and so forth. If you compare auto insurance online, once a year at least when you are going to buy car insurance you would save a huge amount. Now consider the 10 minutes you spend for this and the hundreds of dollars you save at no cost! We give auto insurance quotes for free like flyers!! Now, consider if you have two cars.. its certainly a sweet deal just to compare auto insurance. Right. Have you done this. Compare auto insurance here. Happy with the savings…. Lets move on to what increases the auto insurance premiums.

What increases auto insruance premiums?

 Large number of factors would determine your vehicle insurance premium. Handful of those would be in your control while others may not have anything to do with alterations in your circumstances. The most typical grounds for hike in your cost would be because of losses you suffer or traffic laws you violate.

Driver should avoid traffic violations to keep insurance coverage affordable. It is no secret that insurers would find out about Speed camera tickets and red light violations and increase your premium accordingly. But if you are convicted of drunk driving, your premium would hit the roof or existing insurance provider might even cancel it or not offer renewal terms.

Quite a few reasonable motorists would decide to settle any small damages out of pocket to avoid losing no claim bonuses and premium jumps. Large number of people believe that they should only claim on their insurance in case of a substantial damage. Years of savings on policy costs would justify such decisions.

Policy alterations are another area where rates can be negatively influenced for several different reasons. If an individual relocates to a geographical area that has a higher frequency of incidents than their previous address, the cost of auto insurance coverage could become more expensive due to the higher likelihood of a loss.

Raising protection levels would naturally increase the cost as the insurance company would be taking larger liability. Many people might start with basic cover and add comprehensive and collision coverage and increase the limits in the policy. In this case the rate increase is well accepted and in fact initiated by the policyholder.

Replacing vehicles with the one that has a high theft rate or a lower safety ranking could cause premium to rise. These are material alterations and would push up the possibility of a loss and heighten the severity of accidents.

Adding another person to the policy would increase the premium, especially if the new driver is a teenager or has a poor driving history because the auto insurance provider would be taking on additional claim liabilities.

Policyholder could control most of the above factors. Unfortunately you may receive a premium increase for reasons beyond your control. Insurers who may have suffered significant losses may need to raise premiums to compensate for the claims that have been paid out.

Inflation would be another explanation as to why the cost of cover could go up. At some stage insurance companies would have to pass the inflated cost of operations on to customers. This could be the consequences of increasing costs of labor, utilities, claim payouts and other bills.

You can control your driving, your claims and certainly get discounts for your good driving record and low claims.

Yes, pass on the tip to your friends and family to compare auto insurance and get huge savings!! 

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