Still confused buying an auto insurance policy with an annual plan is better than buying a half-yearly policy?
There are pros and cons for going either payment option, but ultimately it might be in your best interest to stay with the half-yearly plan.Half Yearly Plan The half-yearly or 6-month pay option gives more freedom to shop around for car insurance, whether you are unhappy with your provider or you expect your rates to rise. A 6-month auto insurance policy gives you the advantage of being able to assess your insurance needs more often since it is for only 6 months, an upfront payment can be more when you’re paying half of what you would with a 12-month policy. Yearly plan The main advantage with a yearly or 12-month auto insurance plan is that you are locked in for the whole term, so no changes in the premium for a whole year. This can be good if you have an infraction because you won’t be penalized with higher premiums for the remaining portion of your 12-month term. Reasons for your premium rates to increase Insurance rates can hike up for a lot of reasons, but must first be approved by your state’s insurance department. They can go up due to risk factors and change situations including the following: Driving to Some locations put you more at risk. Chances of paying higher premium rates are more if you move from a low-traffic rural area to a city with more commuters on the road. A move to a part of the country where natural disasters such as tornadoes occur, it will likely mean higher rates. Your premium rates would drop down if you are moving into an area with few climate issues. Premium increases with higher crime rate areas Car thefts can be more common in high populated locations. Changes in your driving record If you get an infraction or are involved in an accident, your premium will probably go up. If an infraction is lifted from your record, you might get a lower cost. Changes in Your credit score Rates can go up accordingly with a bad credit score since most states allow insurance companies to factor in your credit score when deciding what your premium rate will be. A Bureau of Business Research study indicates that if you have a bad credit score you are a risk to auto insurance companies because you’re more likely to file a claim or be the driver at fault in a car accident. State’s laws The kind of insurance and amount of coverage you are required to have can mean higher costs for you as States differ on legal requirements for insurance coverage and these requirements can change. Your Lifestyle
- You end up paying more premium if a teenager is added to your policy
- Your premium rates will probably increase if you are more than 60
- Getting a college degree can result in lower premiums by as much as 20%.
- Get a new car and rates go up, but a depreciated vehicle result in lower rates.
- You get married and your rates become lower, considering less statistically likely to be a risk