Car insurance is something of an opaque industry. We know we have to pay the bill every month; we just have no clue how the carrier arrived at that rate. Everyone criticizes the cable company for hidden fees, but at least they’re on the bill. The hidden fees on your car insurance bill remain hidden — a dollar amount is spit out and you’re expected to pay, no questions asked. Here are four things you need to know before you give them a call.
1) It helps if you’re a woman. Our data has shown that women pay on average 12% less than men do; that means over the course of their driving lifetime men pay an extra $15,000 on auto insurance. The reasons are simple: men drive more aggressively and therefore come calling with claims more often than do females.
2) Education matters. You don’t have to read Shakespeare. You don’t have to understand the practical applications of calculus. Even going to Harvard doesn’t necessarily help. What is important is the level of education achieved. Some folks believe this to be a discriminatory practice — i.e. those with lower education levels pay more for insurance — but it has withstood challenges in the courts.
3) Credit score is often the single biggest factor in your quote. Like them or seriously dislike them, credit scores are relied upon by carriers to predict your level of financial responsibility in the future. A checkered credit history raises red flags for insurers who fear that you might not be able to cover your bills down the line. Some have labeled the practice discriminatory — i.e. those often with less money paying more for insurance — but it has held up in the courts, with the exception of California, where it is illegal to use credit score as a factor when arriving at a quote.
4) You’re most expensive to insurance if you’re young, and old. The youngest drivers pay the most for insurance; premiums are highest at the age of 18 and decline steadily until the driver turns 25. In the eyes of carriers, drivers then enter “adulthood,” in which premiums stay pretty flat for the next 30 years or so until the age 55. Premiums inch up slowly between 55-65 before jumping way up around the age of 75.
Some important things to keep in mind when dealing with insurance companies are:
A lawyer may be worth hiring
The number one thing that insurance companies don’t want you to know is that a lawyer can assist you in a claim. An experienced car accident attorney understands the complexities that are sure to emerge in an accident case. They will also have more knowledge of previous accident cases and their outcomes. This knowledge will help to advise you on whether a settlement offer is too low, making the decision to go to court easier.
Take notes when you interact with insurance companies
It is important to keep track of the information you are given and who you are getting that information from. If you are given false information, the notes you take will help you track down who gave it to you. You may also be asked about your conversations and if you are asked about any information you will have a reference to remind you of what was said.
There are time limits
These time limits vary from state to state, so it is important to understand the laws in your local area. Taking too much time to decide what to do may hurt you in the long run. You need someone in your corner who is looking out for the many ways you can be loop-holed out of the compensation you deserve.