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Auto Insurance Article

Five Reasons to Switch Your Car Insurance

As your life goes through transitions, your auto insurance may need a change, too.

By John Loos    

New jobs, new homes, growing families, and changing lifestyles are common occurrences for many of us.

As your life updates itself, the auto policy that best fit your living situation when you purchased it may no longer be the strongest option today.

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"One of the biggest benefits to doing an annual update of your auto insurance is that you can be confident you are getting the discounts you are entitled to receive," says Lynne McChristian, Florida representative for the Insurance Information Institute.

Along with qualifying for discounts, you could also discover that your insurance company is running new deals or has altered its offerings since you first purchased your policy.

"Aside from making sure you're getting the best deal, many consumers may not realize that insurers are constantly striving to update their 'products' as well," says Jeremy Bowler, a senior director of insurance practice for J.D. Power and Associates.

Take note of these five reasons to switch your car insurance:

Reason #1 - You've Gotten a Traffic Ticket

Accidents happen. However, don't let a mishap behind the wheel lead to a mishap with your car insurance rate.

In the event that getting a traffic ticket causes your rate to rise, it may be wise to compare quotes from other insurance companies to see if you can secure a lower rate elsewhere.

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Traditionally, car insurance companies check your driving history before issuing you a policy - and any marks on your record will likely affect your car insurance rate. After you've purchased your policy, your company could also check your driving history every 12 to 18 months, according to Kiplinger, a financial advice and business forecasting group.

Reason #2 - You've Bought or Plan to Buy a New Car

All cars are not created equal, at least not in the eyes of auto insurance companies. The make, model, and safety rating of your vehicle can affect the cost of your insurance. Therefore, purchasing a new car (even if it's a used car) presents the perfect opportunity to shop around for a new insurance rate.

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Vehicles are reviewed based on the number of claims issued by drivers of that particular vehicle and how expensive these claims are for the insurance companies, according to the National Association of Insurance Commissioners. A claim is an application to your insurance company for monetary assistance in the event of an accident or damage to your vehicle. Claims can affect your collision and comprehensive coverage rates.

So if you purchase a vehicle statistically shown to have a high number of claims, or a vehicle that can be expensive for insurance companies to repair, you might get higher rates.

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Reason #3 - You've Recently Gotten Married or Divorced

Relationships are personal, but they do have an effect on your car insurance.

If you've recently tied the knot, chances are you can save money by putting your spouse on your policy - or vice versa. Likewise, in the event of a divorce, you probably don't want to remain together on the same policy.

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"If you recently married, having you and your spouse on the same policy could save money rather than maintaining two separate policies," says McChristian. "If a couple divorces, removing coverage for their vehicle means you are not paying for auto insurance for the ex-spouse."

Another thing to note is that if you've divorced and have a teenage driver on your policy, your custody agreement may affect whether the teen remains on your policy or your ex-spouse's policy.

Reason #4 - You've Joined a Carpool

Not only does carpooling cut down on travel costs to and from work, but it may also qualify you for a discount with your car insurance company, according to the Mid-America Regional Council (MARC), a nonprofit association of city and county governments in the Kansas City region.

Beyond potentially receiving a discount, MARC suggests that a carpool is also a good reason to examine your policy's exceptions/exclusions section; you could determine if your general liability insurance covers your new passengers.

Reason #5 - You Have a Teenage Driver

You can't stop a kid from growing up, but you can ensure your policy effectively covers a new teenage driver in your household.

Policyholders should shop around for the best rates that include coverage for their teenage driver. These rates should also be compared to the costs for separate insurance if the teen has his or her own vehicle, according to the Massachusetts Office of Consumer Affairs and Business Regulation.

What's more, your insurance company may offer discounts for teenage drivers who complete safe driving courses or excel in school.

"If your teenager is on your insurance policy and he or she is a good student, you want to make sure you are getting the discount for that," says McChristian.

As a rule of thumb, if you experience a major life change, there's a good chance that it may affect your auto insurance. This means that it's time to update your policy.

"If your personal circumstances change, you'll almost certainly want to check to see if this opens a new door for you in regards to insurance savings," says Bowler.

Find out if you could be saving on auto insurance. Get insurance quotes now.

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