An insurance policy is a contract between a policyholder and an insurer, so consumers should make sure that all the details in those contracts are as accurate and up to date as possible. Forgetting to notify your carrier of important changes can lead to coverage issues and claim denials.
Be sure you tell your auto insurance company if any of the following occur.
You’re Moving
Rates are affected by location and where the insured vehicle will be garaged and driven. The reason is simple: A car that whips around the freeways of Los Angeles has a much higher risk of being in an auto accident than one that travels the back roads of rural Idaho. There are more cars on the roads of L.A., which means a higher chance of a collision.
Further, comprehensive coverage premiums will be higher in an area with higher crime rates since the vehicle will be more vulnerable to crimes such as theft and vandalism.
If you’re moving, you want to tell your insurer and pay the premium that applies to your new address. It may even reduce the cost of insurance. Nevertheless, there can be serious problems if you have moved to a high-risk area, have not notified your insurer, and need to file a claim.
Newly Licensed Teen
Nobody wants to absorb the cost of insuring a teen. After all, they are the most expensive group of drivers to insure. But if your teenager just got licensed and will be driving an insured vehicle, it’s in your best interest to tell your insurer.
Insurance companies charge based on risk, and if they are not receiving payment for assuming the risk of a young driver, they probably won’t pay for any accident-related expenses that a youth causes in the covered vehicle.
Policyholders can also choose to exclude their children from coverage to avoid the higher premiums, but they better make sure their children don’t drive any cars that they’ve been excluded from.
Is Your Child Away from Home at School?
Most parents are aware that their kids will get a break on premiums if their child is on the honor roll or maintains a certain grade point average, but having students leave for college can cut rates significantly.
If your child will be heading away for college, make sure you take advantage of any savings. A lot of carriers will reduce the premiums being paid for that child if they will be attending school at a location where they will not have access to the insured cars: usually when the college is out of state or at least 100 miles from home.
However, you will want to make sure that your student will be covered if he or she will be driving your vehicle when visiting home.
Time Heals
Drivers who have had to pay a higher premium because they have some dings on their driving records should make sure to give their insurers a call once enough time passes.
After a certain amount of time, insurers will no longer count particular tickets and/or accidents against you, given that you haven’t added new ones to your record.
Check with your insurer to see when these blemishes on your record will be forgiven and ask your carrier to rerate you when that time has passed, it could lead to cheaper vehicle coverage rates.
Change in Credit Status
Did you find and correct an error on your credit report? Did a delinquent account go away? It’s recommended that consumers check their credit reports annually and you can get your free report here once every 12 months.
All but a few states—California, Massachusetts and Hawaii—allow insurers to use drivers’ credit history as a rating factor, so if you’ve seen your credit improve, ask your insurer if it can lower your rate.
Consider all changes
Over the years, many things change, and if you’ve experienced life changes or are planning on it—like getting married or having a child—you may want to consider discussing options with your company or agent.
For instance, married couples usually receive a discount, and, in many cases, combining coverage rather than having two separate policies can be cheaper.
If you plan on starting a family, you may also want to think about adjusting coverage levels to better protect against financial hardships. Bumping up liability coverage can be done at an affordable rate and can help protect savings that you might plan on setting aside for your child’s future.
