Multi-Pronged Approach to Make Insurance Premiums on Luxury Cars More Affordable

Insurance Premiums

It is a common belief that the more luxurious the car the higher the insurance premiums. However, it is possible to take a multi-pronged approach to make insurance premiums on luxury cars more affordable.

These methods include choosing the insurance company that offers customer-centric products.

Luxury cars are graceful, elegant and stylish and attract envious glances from onlookers. The thrill of driving a luxury car is almost unparalleled. All these factors drive car owners to constantly upgrade their cars and each upgrade costs more than the previous model. The costs of car insurance also go up each time and the car insurance premiums for luxury cars are normally far higher.

While it is fairly reasonable to pay extra premiums for luxury cars as insurance companies also need to pay out more for repairs, there are car insurance companies such as acceptanceinsurance.com who are more customer-centric and allow customers to tailor insurance products according to their needs thereby reducing premiums even for luxury cars.

These kinds of car insurance companies look at the history of driving to arrive at the premium amount. Hence, for drivers who hold a good driving track record without collecting tickets or making insurance claims, the premiums get reduced considerably.

Adding teenagers to the insurance policy increases the premium as most insurances perceive teenagers with added risk based on statistical data. So car insurance policies without teenagers cost less.

Car insurance companies treat drivers and owners who are part of any exclusive luxury car club with more respect and normally offer discounts on premiums. This is because being part of the club sends a message that the owner is caring towards the luxury car and is keen on looking after it well thereby, perhaps, giving a perception of potentially less claims.

Keeping the mileage low on luxury cars also can help in the reduction of insurance premiums since there is an option of pay-as-you-go insurance policies. Moreover, keeping mileages under check sends a positive signal to the insurance company as these drivers are perceived with lesser risk thereby causing reduction in premiums.

Additionally, choosing a combination of insurances such as collision and comprehensive coverage is a better option as these combinations cover more risks at lower costs. Gap insurance for a financed car also is a great option as in the case of an accident, the car insurance company will take care of the market value of the vehicle in addition to covering replacement financing and repair costs.

5 Important Things to Take Note of When Buying Car Insurance

People are usually skeptical when buying car insurance because there are too many technical jargons to understand. Even after going through them all, most end up buying the wrong coverage that doesn’t come to their rescue in times of crisis.

Instead of understanding them all, you can consider knowing the five basic and most important things before applying for a coverage.

Premium and Deductible

These are the very basics that matter the most. Obviously, the premium is the sum you pay to the car insurance company to offer you their services and coverage. The entire amount will be split into monthly or quarterly so that it is easy to pay it. Paying upfront will get you good discounts, but you may have to negotiate it with the company. The deductible is the sum that you have to pay to repair your vehicle in case of an accident. If you can’t pay higher deductibles when an incident occurs, it is better to increase the premium than face unexpected expenses when you are out of cash.

Limits on Liability

Not all car insurances are the same because every company will have different limits on liability. Most companies have the policy of paying 25-50-25 which denotes that they will pay $25k for an injured person, $50,000 for the damaged vehicle and the rest $25k is for damages that occur to a property. Based on the type of vehicle you use and expenses it may incur in case of an accident, you can choose to increase your premium to increase the company’s liability.

Type of Insurance you choose

There are different types of insurances that you can go for. Liability insurance and collision coverage is the most popular of them all. Liability is helpful if you are still learning the nuances of driving. In case of damage to another vehicle, property or person, the company will pay them on your behalf. The laws will vary from one state to another. Collision coverage is helpful where the company will pay to help you repair your vehicle in case of an accident. The other variants include comprehensive coverage and UMPD.

Personal Injury Protection

While there are multiple types of injury coverage offered by the car insurance company, personal injury protection matters a lot. PIP makes it easy to cover medical costs for the driver as well as the other passengers in the car. It even covers a pedestrian if they accidentally get involved in the collision and get hurt so that you don’t have to pay anything out of your pocket.

Depreciation

Depreciation is an important aspect that companies don’t elaborate, but something you should know in depth. If you have been using your car for a long time, you may not be able to make huge claims as its value depreciates over time. In such scenarios, ensure that you either reduce your premium or consider replacing your old car with a new one so as to make proper claims from the car insurance company.

Companies Demand Increased Costs to offer Car Insurance for Teenagers

A person cannot drive a car without a proper car insurance, but when the driver is a teenager, obviously the company wants them to pay much higher than their adult counterparts.

They are just not simply claiming more based on a basic assumption that teenage kids are irresponsible drivers, but have plenty of statistics to prove that they indulge in more accidents than anyone else. If you are planning to go for an insurance policy, it is much better to add a teenage son or daughter to the family’s comprehensive policy than buy one separately. An individual application will cost much more than adding them to an already existing package.

A deep analysis was conducted by the website Insurance Quotes and at the end of their study they declared that teenage kids aged 18+ add 77 percent of insurance costs to their parents because companies wouldn’t insure them for anything less. Besides, if they are going to purchase it separately, they have to pay 18 percent more when compared to a joint policy along with their parents.

The only way for a teenager to reduce the cost of their car insurance is to maintain a clean record every year and the yearly premium will slowly reduce, based on how well they do on the road. Obviously, if they manage to sustain for another two to three years, they will be 21 by then and will be considered adults which leads to further reduction in the insurance costs.

Adding to the allegations, the Highway Safety Research Center documents claim that teenagers are the cause of accidents due to their careless behavior, increased usage of smartphones and lack of concentration on the road. Such negative aspects lead to accidents, which in turn result in demands on the insurance companies to pay for the damages they caused. In order to cover any loss, the companies demand a bigger payment upfront.

Arthur Goodwin, a senior research associate at the center suggests that parents shouldn’t limit their kids and help them understand various elements of road safety. Instead of asking them to drive within the neighborhood and to college every day, they should expose them to various terrains including hills, highway driving among other locations to give them the much needed experience. Under adult supervision, teenagers can understand the nuances of driving to become better drivers in a short term and can avoid accidents. Elders can also pay more upfront to reduce car insurance costs to add a teenage kid to the existing family policy.

Insurance Quotes are higher for Hybrids than Gas Vehicles, New Survey Reveals

In the past couple of years, hybrid cars have gained great momentum because they are exceptionally fuel efficient, meet eco-friendly standards and have great drivability factor when compared to the conventional vehicles.

Car manufacturers have accomplished such feats because of the fact that they were able to use lightweight parts, better batteries and altered the shape of the vehicle as they wanted to. It plays a crucial role in allowing the automobile manufacturers to come up with hybrid vehicles that offer good mileage. However, a recent survey confirmed that even though hybrid car owners have the opportunity to save money they may have to face increased insurance costs which eat up some of their savings. To avoid this situation, car owners must be aware of the insurance quotes that are on offer.

The overall cost of acquiring a vehicle insurance is at least 7% higher than gasoline counterparts of the same models. When users pay $1841 for a Honda Civic gasoline variant, they have to shell out $1817 for the hybrid variant, but it is probably among the least number of vehicles that cost lower. Every other model including the Hyundai Sonata, Subaru XV Crosstrek and Toyota Highlander cost higher than their gasoline counterparts.

The Highlander cars demand the highest insurance quotes. This is because you have to pay $1,686 for the gasoline model while the hybrid insurance will set you back by $1,884. That’s a solid 11.8% increase, but on an average, all hybrid models, be it SUVs, sedans or other types of vehicles, they cost 7% higher than their petrol, diesel counterparts.

According to the study, hybrid cars occur higher insurance costs because they usually cost more in the market. If a vehicle gets damaged or stolen, the company may have to pay extra when compared to a gasoline powered vehicle. They also have to cover repair costs which are much higher for hybrid cars due to expensive spares. The job can be handled only by professionals who have the experience in repairing such vehicles which adds up to the overall cost. From a company’s perspective, the increased premium is completely justified.

However, from a consumer’s perspective, it looks like they may have to pay additional costs which debunks the whole idea of owning a cost efficient vehicle. Besides, they are eco-friendly as they don’t have emission issues. There are specific companies that offer insurance at competitive rates. If you are planning to go for a hybrid, you should consider signing up with these brands in order to keep expenses under control.

Decreasing Fuel Costs Drive Car Insurance Rates Upwards: Premiums Raised to Offset Increasing Claims

While decreasing fuel costs are saving Americans a lot of money, the flip side is that cheaper fuel is driving car insurance rates upwards. Auto insurance companies are increasing premiums to offset increasing accident claims.

It was predicted during early 2015 that almost $75 billion would be saved owing to fuel becoming cheaper. During the Labor Day weekend alone, over $1 billion was saved as fuel costs dipped by more than $1 per gallon as compared to the same period last year.

However, it seems that lower fuel costs also have a price to it. And it comes in the form of higher car insurance rates. Researchers have been able to prove that as gas prices decrease there is an increase in traffic fatalities. Driven by cheaper fuel, more cars are found on the roads, thereby increasing both traffic and congestion, which in turn leads to enhanced number of accidents.

Cheaper gas prices have recently been more of a trend rather than a blip and the long-term effects of decreased fuel prices seem to be playing out now. According to Associated Press, traffic fatalities increased 14% during the first half of 2015 and road deaths are predicted to cross 40,000; a first since 2007.

While the predicted increase in death fatalities by themselves present a morbid picture, the increased traffic is also leading to increased auto insurance rates and these rising costs are affecting all drivers, whether or not they were involved in accidents.

Wall Street Journal reported that the country’s top car insurers including Allstate and Geico are already increasing auto insurance rates. Allstate has received several state approvals to implement the increase in premium rates by an average of nearly 4%. Geico, a subsidiary of the Warren Buffet-owned Bershire Hathaway Inc., is also planning premium rate hikes to offset the increasing severity and frequency of customer claims.

While cheaper fuel is an important factor for increasing road accidents, there are other factors too. An improving economy is helping more drivers to get on to the road and rising road accidents are attributed to those drivers involved in texting or similar distracting activities while driving. And these distracted drivers are more to blame for increasing accidents, believes Warren Buffet. ‘If cars are better- and they clearly are- drivers must be worse (adjusted for mileage),’ he told WSJ in an email.