How to Lower or Avoid an Auto Insurance Surcharge

Doing what is necessary to avoid an auto insurance surcharge is always useful if you are trying to keep to a budget. Understanding what circumstances will incur a surcharge with insurance companies will help you to avoid them.

Loyalty
It tends to be easier to negotiate a good deal with an insurance company that you have a history with. Accordingly, don't be afraid to make the insurance company work to retain your business. If you have built up a no claims bonus, this should be sufficient to prevent an auto insurance surcharge being applied to your renewal premium. If your insurance company seeks to increase your premiums because of market conditions but you want to stay with them, obtain quotes from rival insurers to present to them. This will help your negotiating position when you try to reduce your renewal premium.

Adjust Deductible
A deductible is an unavoidable auto insurance charge that needs to be paid by the policyholder in the event of a claim. Although it is always necessary to pay the first part of any claim, most insurers will allow you the option of varying the sum that you pay. There will be certain circumstances where the insurers will demand a certain sum. However, in many situations, you will have the option to reduce or increase your car insurance premium by accepting a higher or lower deductible respectively.

Minor Accidents
Where you suffer only a minor accident, consider whether it is worthwhile to make a claim through your insurance company. In this situation, bear in mind the fact that the insurers will not pay any sum that falls below your deductible, but may still take the accident into account when it comes to renewal. Avoid this by getting quotes for any minor repair work to determine whether the price will fall below the deductible. When this is the case, it will be more cost effective to get the work repaired without resorting to your insurance company so you can avoid an auto insurance surcharge.

Decline Extras
Auto insurance rates will usually be affected by extra services that insurance companies offer as part of an insurance policy package. Services such as glass repair and roadside assistance will usually attract a surcharge. In view of this, it is worthwhile considering whether you will be likely to make use of these services. For a reliable car, it may be more cost effective to engage the relevant service as and when necessary.

Driving Record
The driving history of policyholders is taken into account by insurers when considering premiums. Accordingly, you may find that your auto insurance rate increases if you have been caught speeding or similar driving violations. Ensure you always abide by the law in relation to your driving, the maintenance of your car, and the renewal of any documents to avoid trouble, and consequently an increased premium. Be aware if you cause an accident within the first 12 months of your new policy, the next time you call for a price, you will be hammered with a large percentage increase on your policy. This is basically a way for car insurance cost to be recovered by the companies. Having a number of moving violations tells the insurance company that you like to take risks when you drive, and are more likely to have an accident. If the court costs are lower than the possible surcharge, fight your ticket to keep your good driving record.

Percentages
Watch out for the base rate charged by the company you insure with. If you are penalized by a surcharge, they will not always take their base rate percentage into account, but more likely a percentage of what you were paying on your previous years' policy. Try to get surcharge information from them prior to signing, if you can. Many companies are reluctant to disclose this figure because it is not legally set by any "body" or organization. Try to press them for an answer.

Insurance Subrogation
If you are not at fault for an accident, but still need to make a claim against your insurance to repair your vehicle, your insurance company will most likely hit you with a surcharge to try to recoup their costs. When you can prove the other party was at fault for the damages, ask your insurer for subrogation on your behalf. In this instance, your insurance company will pay out your claim and then take legal action against the other driver to get their money back instead of tacking it on to your policy as a surcharge.

Surcharge Time Limit
Moving violations and insurance claims stay on your driver's insurance abstract for a limited period of time. Most jurisdictions have any tickets erased from your record after 2 years, while insurance claims remain on your record for up to 6 years. Keep a note of any negative incidents on your record and inform the insurance company to stop billing the surcharge when your record is clean.

Remedial Driver's Ed
Some car insurance policies will reinstate your good driving record if you demonstrate a desire to become a better driver. Taking a remedial driver's education course and road test can help convince an insurance company to drop a surcharge. These courses are usually not very expensive and will help you save thousands over the long term.

Verify the Surcharge
If you notice an auto insurance surcharge on your statement, make sure you understand why it's there. Call your insurance company and have them describe to your satisfaction why the surcharge has been applied. You may discover that the insurance company mistook a parking ticket for a speeding ticket, or perhaps someone else's claim was made against your account by mistake. Human errors happen; be sure you aren't paying for one.