![]() ![]() Currently, only three states-California, Hawaii, and New Jersey-offer subsidized insurance coverage for lower income drivers. Low-limit coverage: Douglas Heller, an insurance expert with CFA, says that although they offer better protection, umbrella policies and policies with higher liability limits can be difficult for lower income drivers to afford. ![]() Those policies usually up the per-person coverage to $300,000. Robert Hunter, the insurance director at the Consumer Federation of America (CFA), says that an umbrella liability policy extends coverage for both your car and home, and it offers additional protections as well. A more protective level of coverage is $100,000 per person, $300,000 per incident, and $100,000 for property damage. Depending on your state, a portion of your wages could be garnished in a judgment against you. Experts recommend buying more than the legal minimum even if you don’t have much in assets to protect. Liability insurance: This covers bodily injury and property damage caused to another party in a crash. Most states require drivers to have at least minimum coverage, but it’s a good idea to bolster your coverage beyond these minimums if you can afford to do so. Customers in areas with higher rates of collisions are also likely to pay more. For example, if damaging storms in your area have generated lots of car-insurance claims, your company may apply to your state’s insurance regulator for an across-the-board rate increase to reflect its increased exposure to that risk. ![]() ![]() California, Hawaii, Maryland, Massachusetts, Michigan, Oregon, and Utah restrict or prohibit credit-based insurance scores, but in other states, lowering your credit score can help you get a better rate.Įxternal conditions: Local weather trends, traffic conditions, and other factors that increase the likelihood of claims result in higher rates. Insurers maintain that credit history is a good predictor of risk that they’ll have to shell out for insurance claims, and they price their policies accordingly. High-performance cars also increase the cost of insurance, due to the increased risk associated with owning a faster car.Ĭredit history: According to Experian, a credit reporting agency, most states allow insurers to calculate auto premium rates based on a customer’s credit score. Accidents, traffic violations, or the addition of a teen driver can raise the cost of your policy, because the insurer puts you in a higher risk category.Ĭar type: In general, the more expensive the car, the higher the premium, because expensive cars cost more to repair and replace. For starters, it helps to understand what attributes insurers consider when they formulate your monthly premiums, including the following factors:ĭriver profile: Age, driving experience, and driver history all influence the cost of your premium. But there are a number of factors to consider as you shop for an auto policy. Through a member survey, CR has identified the insurance companies that offer the best service with the most competitive monthly premiums. Consumer Reports recommends shopping around for the best policy, not only when you buy a car, but periodically, to make sure you’re always getting the best deal possible. Not only is your policy designed to protect you from financial calamity in the event of a collision or related injury, it is required by most states if you own a car. Insurance isn’t the most exciting facet of car ownership, but it is one of the most important. ![]()
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