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10 Dumbest Ways on How to Increase Your Insurance Rates

by A. Montalbano on 10/23/14

Its official!  From the reckless to the obsessed, countdown to the dumbest decisions policyholders have caused their rates to rise without insurance companies ever lifting a finger:

10.  Removing Comprehensive Coverage.  Comprehensive (also described as "Other than Collision") is usually required by your car lender.  After Cheap Charlie paid off his car, he decided, without discussing with his agent, to remove Comp Coverage.  That weekend, he took his family to a special event in the city.  When the event was over, his car was stolen from the parking lot.  

Smart Move:  Comp covers theft, water damage, vandalism, fire, damage sustained from a deer or bird or severe weather, damage from a falling object, such as a tree.  An inexpensive coverage to keep. 

9.  Over-use of windshield repair.  Betty thought her windshield repairer was connected to her insurance as she assumed when the repairer told her the cost of her windshield repair is "free".  He requested her copy of her insurance card, repaired her windshield and she was on her merry way.  A month later, she received a review of her insurance by her agent and found two comp claims.  The windshield repairer had filed against her insurance. A pile of claims is a sure ding to your rate.

Smart move: The cost to repair a windshield chip is usually well under $80.  Pay out of pocket and save your insurance for damage that is well over your deductible.

8.  Texting: Dizzy Sally finds it challenging that she can text and drive at the same time, never gets caught, until one unlucky day.  She drove through a school zone while texting and is pulled over by law enforcement.  While no injuries or death sustained this time, driving while texting is not only a sure way to get a ticket in some states but a dangerous habit that leads to fatalities.  Some states are pushing for equal to or higher penalties than that of a DUI.

Smart move:  When involved in an accident, the first thing an insurance claims office will do is investigate.  An interview is held and a copy of your cell phone bill is requested.  No text is that important to place others in the line of danger.  If you don't value your own life, at least don't de-value others.  It can wait.

7.  Not enough coverage.  Dan the Man drives a 2015 Ford F350 with bubble tires and includes a lift kit while only carrying liability limits of 30/60/25. Keep in mind that a monster truck can cause severe damage to a 2015 Mercedes Benz when involved in a collision.  $25,000 is not going to cover a totaled Mercedes Benz.

Smart move:  We love monster trucks, but they are better served in show.  Most insurers don't go for supped up rides, so keep it simple and think of need, not hot performance.  Go for coverage that will keep your assets out of the line of fire if the accident is your fault.

6.  Rental Car:  Busy Bonny used her insurance to rent a car while on vacation.  If you damage the rental car, the claim will be filed under your insurance.  A sure way to earn a claim and increase your rate.

Smart move:  If buying insurance at the rental office while renting a car is low enough to pay out of pocket, then this is a way to go.  Stay clear of claims against your primary insurance.

5.  Borrowed Car: Reckless Ron borrowed his friends' car and hit a car in a shopping center.  Reckless people live reckless lives and recklessly don't bother taking care of things, including your car. 

Smart move:  Don't give the reckless relative or friend the keys to your only ride!  But if you must, demand he get an non-owners insurance policy so if he creates damage or bodily injury to another driver, the claim can be filed against his insurance, not yours.

4. Late payment:  Party-boy Pat had a great time last weekend and spent his entire paycheck on his friends.  His insurance is due on Monday and he forgot to make the payment, so it becomes a late payment.  Late fees add up and can go as high as $15 each time.  Some billing departments will vouch for a late payment or two while others cut you off by the third or fourth time causing a cancelled policy.  If reinstated, a surcharge is usually added.

Smart move:  Pay your bills first, of course.  But bank drafts are a good way to help change your paying pattern.  No late fees, no cancelled policy.   
3.  Stopping too close to the car in front:  Eager Edward weaves in and out of traffic and usually rides bumpers.  He hits the car in front and claims it is only a small scratch.  Regardless, he just caused a claim.  If you cannot see the back tires of the car in front of you, you are waaaay to close. 

Smart move: Keep a smart distance between cars. You never know when the idiot behind you plows into you which will force you into the car in front of you.

2.  No insurance for over 30 days:  Lost your job, car is under repair, sold the only car you owned? Why have insurance if you don't need it have a car, right?  In the state of Texas, anyone with a license must show proof of the minimum liability coverage, even if you don't own a car. Trying to get insurance later is a real dumb move because the surcharge is hefty.

Smart move:  The state of Texas knows you have a license and will eventually get behind the wheel, whether its your car or someone elses.  If you don't own a car, obtain NON-OWNERS liability coverage so there is never such an issue of not having coverage.  If your car is non drivable, pull the liability and add comprehensive so that your policy stays inforce at all times and never without. 

1.  DUI/DWI:  Social Sandy loves to treat her friends to after-hours on Wednesdays. She drives home with a small BUZZ all the time but is finally pulled over.  Driving under the influence or driving while intoxicated, even a small buzz, will get you a lifetime of hardship and/or jail time.

Smart move: Before you go out, don't chose to drink.  If you do, take a friend and ask them to be the designated driver.  If not, keep this site handy before you head out:  http://www.drinkinganddriving.org/designated-driver-services/default.aspx

On medication? If you are on prescribed medication, you are impaired.  Don't, get behind the wheel. This is just as reckless and dangerous as the DUI/DWI dummy.

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