financial corner: SIFE-Less risk, lower car insurance premiums

U-News Staff

Like other forms of insurance, a small premium is paid on automobile insurance on a regular basis in order to ensure financial coverage during unplanned events.

Each insurer calculates premiums differently depending on the policy and company.

As a form of risk management, premiums are designed to match various risks.

Any trend, activity, or performance that shows a potential road accident contributes to the cost of car insurance.

For instance, women tend to pay less than men because studies from the National Association of Insurance Commissioners show women are less likely to get into accidents, have fewer speeding tickets and  are less likely to drive under the influence of alcohol and other controlled substances.

Moving violations (speeding, running red lights, unsafe u-turns, etc.) can often be amended to non-moving violations if one pays additional fines. Keep in mind that a history of moving violations can hike up insurance premiums, or even worse, lead to a suspended license.

Fighting a violation in court is the best way to get it expunged from a record. Based on a study from Insurance.com, a driver with multiple moving violations could pay up to 50 percent more on his or her premium than a driver who doesn’t have a moving violation.

Another risk could be geography. A study conducted last year by Runzheimer International listed which cities had the highest yearly premiums. The top two, Detroit and Philadelphia, had premiums of around $6,000 and $4,000, respectively.

This was because of the high crime rates and the high unemployment rates in the two cities. From an insurance company’s stand points, these are risk factors for auto theft.

For students, there are several savings possibilities.

Students should ask their  insurance company about any discounts that could be applied to their student status.

One may be able to receive the discount after only spending a couple hours of your day taking a safe driving class.

Also, many insurance companies offers discounts for multiple car insurance policies.

The most important advice: be a cautious driver. You will enjoy a safer life with fewer fines and lower insurance premiums.

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