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Auto insurance seems pretty straightforward compared to the confusing world of health insurance, but there’s a lot you may not know. Insurance companies aren’t always forthcoming with this information, so it’s important to do your homework and understand everything from your rates to how to cancel a policy. Below are a few things you probably didn’t know about auto insurance.

What You May Not Know About Auto Insurance

1. It Pays to Shop Around

It’s easy to get a policy, pay your premiums, and avoid the hassle of shopping around and switching providers, but it could cost you. Rates vary significantly from one provider to the next, so it’s wise to get car insurance quotes at least once a year to ensure you’re still getting a good rate. If you’re not, either negotiate a lower rate with your current provider or make the switch.

2. Switching Is More Complicated Than Just Stopping Payment

Unfortunately, if you decide to switch providers, it’s not as simple as stopping payment with one and paying the other. There are cancellation forms you must complete, among other paperwork. It’s wise to time the cancellation of your old policy with the start date of your new policy so there’s no gap in your coverage, which could result in higher premiums. Non-payment without filling out the proper paperwork could also ding your credit score.

3. A Variety of Factors Affect Your Insurance Rates

auto insuranceYou’re probably aware that your driving record has a major impact on auto insurance rates. What many people don’t realize is prior claims, particularly those for at-fault accidents, and even your credit score, also affect rates. The higher your credit score, the less likely the insurance company will view you as a high-risk driver, resulting in lower premiums. Other variables that may affect rates include age, place of residence, vehicle make and model, and the average number of miles you drive in a year.

4. Your Provider can Drop You without Notice

If you fail to pay your premium on time, lose your license, or even submit too many at-fault claims, your provider can cancel your auto insurance policy without notice. If the provider cancels the policy, they are required by law to provide a reason for the cancellation, but that doesn’t apply to non-renewals. There’s also a “binding period”, which is usually 60 days from the start of the policy, in which they can cancel if any discrepancies with your application are found.

 

The world of auto insurance is more confusing than it appears on the surface. If you need a company who will look after your needs when it comes to auto, home, health, life insurance, and more, turn to Mutual Underwriters. With 5 locations throughout Hawaii and 60 years of experience, they’re equipped to handle all your insurance needs. Learn more about their products online or call (808) 532-2888 to request a car insurance quote.

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