Your very first insurance premiums will very likely be higher than they will ever be again. That is, if you're careful. Like your first experience with buying on credit, you won't get as good a deal as you will once you show how reliable you are, whether in your bill-payments or your driving habits. You start out as an unknown quality to insurers, so they start you out at a price that lets them be sure not to lose money on "people like you."
Many will argue that the lack of insurance history should not increase one's premiums. Regardless, among the many considerations in determining premiums are an applicant's demonstrated ability to maintain their payment schedule, their proclivity for making claims on their past policies, and their demonstrated clean driving record. A failing in any of these areas will have the effect of markedly increasing your premiums to a much higher rate than you would prefer.
One thing they can check easily is your credit history. Be sure you have a track record of paying your bills on time. For example, if you've let a previous policy lapse because you quit paying the premiums, you can bet that will cost you when it comes time to deal with your new insurance company. They want to get paid! And now you look like you might not take that seriously.
Though you can find brokers offering high risk insurance covers at best rates for persons with a new driving license, or for a person with lots of traffic violations or accident claims, the fact is ,the initial payment and the deducted amount will compensate the rate offered ,finally summing up for a poor insurance coverage.
So, for amateurs, it is best advised to go for a short term insurance policy, say around 6 months. Prompt timely payment and a good driving history for at least 6 months will give you a good chance of having a better quote next time. Instead of continuing or extending the same policy after 6 months, it is always better to compare what the other companies are ready to offer you. No doubt, there might be some surprising deals for just 6 months of clean history which might save you a handsome amount, may be a few hundred dollars.
Those drivers who maintain coverage for several years through the same company may not be taking advantage of potential savings that are available to them. Insurance companies are not in the habit of pro-actively offering existing customers lower rates, even if they may qualify for them. On the other hand, competing insurance companies are more likely to offer a potential customer with a strong history better rates in the hopes of getting them to switch providers.
Be street smart. Make sure you go around and hunt to get the best quotes from the Insurance companies which are ready to offer you their services before selecting your Insurance policies. Think twice before getting committed to a policy. A little amount of good behavior such as not allowing the policy to lapse, clean driving record or prompt payment of premiums on time can reward you with higher rates and get a better deal the next time you start hunting for the best cover.
Many will argue that the lack of insurance history should not increase one's premiums. Regardless, among the many considerations in determining premiums are an applicant's demonstrated ability to maintain their payment schedule, their proclivity for making claims on their past policies, and their demonstrated clean driving record. A failing in any of these areas will have the effect of markedly increasing your premiums to a much higher rate than you would prefer.
One thing they can check easily is your credit history. Be sure you have a track record of paying your bills on time. For example, if you've let a previous policy lapse because you quit paying the premiums, you can bet that will cost you when it comes time to deal with your new insurance company. They want to get paid! And now you look like you might not take that seriously.
Though you can find brokers offering high risk insurance covers at best rates for persons with a new driving license, or for a person with lots of traffic violations or accident claims, the fact is ,the initial payment and the deducted amount will compensate the rate offered ,finally summing up for a poor insurance coverage.
So, for amateurs, it is best advised to go for a short term insurance policy, say around 6 months. Prompt timely payment and a good driving history for at least 6 months will give you a good chance of having a better quote next time. Instead of continuing or extending the same policy after 6 months, it is always better to compare what the other companies are ready to offer you. No doubt, there might be some surprising deals for just 6 months of clean history which might save you a handsome amount, may be a few hundred dollars.
Those drivers who maintain coverage for several years through the same company may not be taking advantage of potential savings that are available to them. Insurance companies are not in the habit of pro-actively offering existing customers lower rates, even if they may qualify for them. On the other hand, competing insurance companies are more likely to offer a potential customer with a strong history better rates in the hopes of getting them to switch providers.
Be street smart. Make sure you go around and hunt to get the best quotes from the Insurance companies which are ready to offer you their services before selecting your Insurance policies. Think twice before getting committed to a policy. A little amount of good behavior such as not allowing the policy to lapse, clean driving record or prompt payment of premiums on time can reward you with higher rates and get a better deal the next time you start hunting for the best cover.
About the Author:
Graham McKenzie is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading Car Insurance portal.
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