Three Life Milestones That May Affect Your Auto Insurance
Major life events can have a huge impact on your auto insurance rates. The effect is there for major life events that increase or decrease your perceived risk in the eyes of the insurer. Here are three major life events, and why they may impact your auto insurance rates:
Graduating From College
Your level of education may have an effect on your insurance rates. Your premiums are likely to go down when you graduate from college. The difference can be as high as a double-digit percentage. The exact figures differ, but higher degrees attract better rates than first degrees. Therefore, whenever you graduate, don't forget to update your level of education when renewing your auto insurance.
A good reason for this is that, at least according to some studies, those who are better educated are less likely to file for small claims than their less educated counterparts. This may be because of their high paying jobs that enable them to settle small damages out of pocket. Some people consider this a controversial and discriminatory practice, but the fact is that some insurers use education to evaluate premiums.
Apart from graduating from college, getting hitched up is also bound to have an effect on your auto insurance rates. Some insurers charge higher rates to single persons compared to their married counterparts. Therefore, make sure you update your marital status with your insurer after your wedding. The effect works both ways; your rates may climb if you lose your marital partner, either through death or divorce. Insurers who consider marital status contend that married persons are careful drivers and are more responsible than their single counterparts.
Owning a Home
Owning a home is an expensive and major step in most people's lives. Fortunately, some car insurers give discounts to those who own their homes as opposed to those who live in rental units. Home ownership is a huge responsibility, and some insurers believe the responsibility may spread to other areas of life, including car-related safety. The discounts may be there whether or not you purchase both homeowners and auto insurance from the same company, but bundling coverage will score you higher discounts.
Therefore, any time you go through a major life event, analyze it to see how it can affect your car insurance rates. The above are just three examples, but other major life events may have comparable effects. You can always talk to your insurance agent for clarity if in doubt.