Car Insurance: Understanding the Basics and Beyond

Insurance companies also offer discounts on safety devices like motorized seat belts, believe it or not. The neighborhood you live in impacts your insurance rate because insurers go by the statistics in your local area. This includes type and frequency of crime, like car theft and vandalism, demographics of people, and even the type of cars in your locale. The algorithm analyzes all those data points to calculate the dollar risk and probability of car theft, car accidents, and so forth.

Most people won't be able to move to another area just to reduce their car insurance, but if you're already planning to move it's something to consider. For example, urban neighborhoods have higher rates of accidents, thefts, and vandalism in rural areas, and therefore higher car insurance premiums. So maybe it's time to head for the hills. It is good to ask your insurer if they offer any other less commonly known discounts you might be surprised. For example, some insurers offer special discounts for military personnel, veterans, senior citizens, teachers, employees of certain companies, and so forth. It never hurts to ask the worst answer you can get is that there are none.

Another tip is to always keep your car insurance active, even if you even have a brief lapse in coverage. It can increase your premium. Also, paying your full premium up front is generally cheaper than paying monthly, which can be higher and come with an administration fee. There's a thing called black box car insurance, it's a newer user-based type of insurance. Basically, you put a tracking device on your car that records your driving behavior and mileage. Then the tail is the premium based on how safe you drive and how much you drive. Big brother is watching you, so if you're a safe low-mileage driver this might give you a reduction in your premium, but if you're not as safe as you want to believe you are it could work against you and lead to a higher premium.

The origin of car insurance dates back to the founding fathers of the U.S. Benjamin Franklin, one of the founding fathers, was one of the forefathers of insurance in the U.S. He formed the Philadelphia Contributorship, which was the first company in their colonies to offer fire insurance in 1751. The organization issued 143 fire insurance policies that lasted for seven years. Well, not one of those insured properties caught fire during that time but it did blaze the way for the insurance industry of America and it made a lot of money for old Ben.

It wasn't until 1897 in Dayton, Ohio, that the U.S. saw its first automotive insurance policy. It was issued by the Travelers Insurance Company to Gilbert J. Loomis for a hundred bucks. It protected him if his car killed or injured someone or damaged their property. By today's standard, the insurance plan was very basic, pretty much it is the earliest form of car liability insurance.

In the early days of cars, car insurance was optional and rare. Safe driving wasn't something people cared about in fact anyone could operate a car even if they had no idea what they were doing. It wasn't until 1903 that Massachusetts and Missouri became the first states to require drivers to have a driver's license. By 1930, 24 states required drivers to have a license, yet only 15 of those licenses required a driving exam.

It wasn't until 1959 that all states required drivers to be licensed and tested. The car insurance industry took much longer to become mainstream. Massachusetts was forward-thinking in 1927, it became the first state to require drivers to carry car liability insurance but believe it or not for 30 years until 1957, Massachusetts remained the only state to legally require drivers to have car insurance.

Today, only two states don't require car insurance and that's Virginia and New Hampshire. The latter isn't surprising since it is the live free or die state anyway. There's an organization called the National Association of Insured Commissioners according to their statistics, car insurance premiums have been rising in the double digits up to 30 in recent years.

According to AAA, the average annual premium for a new car is over $1200 bucks. So when it comes to car insurance, it doesn't hurt to shop for quotes every several years just in case a lower rate is now available elsewhere. And here's a caveat, just don't go for the cheapest you should consider the company's financial strength and credit worthiness what's the point of paying the cheapest rate if it turns out the company won't be able to cover you later on or they delay processing your claim in a timely manner.

If you have any funny or horror stories with dealing with a car insurance company, please comment below and share. If you liked the video, please like and subscribe to my channel thanks for your support.

"WEBVTTKind: captionsLanguage: entoday we're looking at tricks to cut your car insurance costs we'll also look briefly at how car insurance even became a thing and how it's evolved over the years so hop in and let's get going when you're paying your premium you might have that thought that maybe you can get by without car insurance but when an accident happens or are you glad you have it so how can you protect yourself while minimizing your costs one way to lower your car insurance premium is through discounts for example there's a multiple car discount in general if you have multiple cars and multiple drivers who are related by blood or by marriage and are living in the same residence then you qualify for a multiple car discount let's say you're newly married you and your spouse each have a car but under separate company but you might be able to lower the collective car insurance if you insure both cars under the same company as a married couple or let's say you have a teenage son in that case most likely already paying a bit more because premiums are generally higher for teens but if your son's school grades are b or above or he ranks in the top 20 percent of his class then you should ask your insurance provider if they offer a good student discount many providers offer this for teens and young adults until they turn 25 years old companies reason that high schoolers and college students who are responsible are most likely to be responsible drivers and less likely to need an insurance claim the discount can range anywhere between one percent up to even 39 depending on the company you'll need to provide some proof of eligibility it all depends on the insurer but typically it's an official school transit or report card or maybe sat scores showing they're in the top 20 percent of the national average on a similar note did you know that your credit rating impacts your car insurance rate many folks are actually surprised to learn this the reasoning is similar to that behind the good student discount statistics show that a person with an excellent credit rating is usually someone who is responsible and mature in their personal life and less likely to file an insurance point in other words it means less risk for the insurance company in fact if your credit rating is poor you may be paying 50 or more on your car insurance premium so you might want to see how you can improve your credit rating to good or excellent it'll take time to build up your credit but it's worth it because it'll help you in other aspects of your life too another way to cut your car insurance costs is by qualifying for a multi-line discount for example you probably already have a homeowners insurance or renters insurance so if you can get your car insurance and your home owners or renters insurance to the same company you'll see greater savings for example allstate offers up to 10 car insurance discount and 25 homeowners discount if you bundle them together under their company did you know that you can lower your car insurance premium by paying more attention on the road literally most people know that traffic violations and accidents count against you and can raise your premiums but what many don't know is if you're an alert defensive driver this means less traffic violations and accidents on your record which means you qualify for a good driver or safe driver discount it can range between 10 to 23 depending on your driving history and record consider it a reward for safe driving also did you know that the annual mileage you put on your car impacts your insurance premium in general it's good to ask your insurer how many miles they currently have you on record is driving that's because they estimate this information and if it's wrong by a large margin that means you're paying more than you should so it's good to check it and get that corrected if needed also if you commute as you're driving two to three hours every day your premium will be much higher than someone who commutes to work near their house one way to reduce your premium is to ask your insurer about their mileage threshold if the savings are significant and you're able to reduce your mileage by taking public transportation or the office van pool part of the time that might be worth considering so you may love your vehicle but did you know that the type of car you have impacts your premium let's say you bought your large dream suv unfortunately ensuring a 5 000 pound high-end car is more expensive than ensuring a smaller safer less expensive commuter car also if this commuter car is a hybrid or alternative fuel car you can qualify for further discounts so if you really need to cut your insurance premium and fuel costs then consider downsizing to a hybrid commuter car for example or if you're shopping for a car right now then evaluate insurance costs before you buy the year make and model has a big impact on your insurance rate so it's worth getting the insurance estimate because it can help influence which car you choose from your shortlist but let's say you have an older car well you might want to consider nixing collision or comprehensive coverage the reason is you might be paying more than your car is worth and then if it gets totaled you don't get much money back anyway the general rule of thumb is to add your collision and comprehensive premium costs then multiply it by 10 compare that value with how much your old car is worth right now if your car is worth less than that value it might not be beneficial to get collision or count that's because the average policy holder makes an insurance claim just once every 11 years and reports a total loss once every 50 years another way to cut your insurance costs is to look at your deductible the higher the deductible the lower the premium if you're the kind of person who likely won't file smaller claims anyway because let's say you don't want to risk pushing up your premium for example then it might make sense to raise the deductible in your policy and enjoy a lower premium going from a 250 deductible to a thousand dollars can mean saving between 25 and 40 percent on your pulse then you can set aside those savings to use as your deductible and cover your costs in the event of an accident if you already have homeowners or renters insurance you already know that you can get discounts if you have certain anti-theft devices installed well it's a similar thing when it comes to cars depending on the insurer you might be able to get up to 25 off if you have an anti-theft system in your car each insurer has their own requirements on car alarms and load jacks so you want to ask first before you get it installed some insurers also offer discounts on safety devices like motorized seat belts believe it or not the neighborhood you live in impacts your insurance rate that's because insurers go by the statistics in your local area this includes type and frequency of crime like car theft and vandalism demographics of people and even the type of cars in your locale the algorithm analyzes all those data points to calculate the dollar risk and probability of car theft car accidents and so forth of course most people won't be able to move to another area just to reduce their car insurance but if you're already planning to move it's something to consider for example urban neighborhoods have higher rates of accidents thefts and vandalism in rural areas and therefore higher car insurance premiums so maybe it's time to head for the hills also it is good to ask your insurer if they offer any other less commonly known discounts you might be surprised for example some insurers offer special discounts for military personnel veterans senior citizens teachers employees of certain companies and so forth it never hurts to ask the worst answer you can get is that there are none another tip is to always keep your car insurance act if you even have the briefest laps and coverage it can increase your premium also paying your full premium up front is generally cheaper than paying monthly which can be higher and can come with an administration then there's a thing called black box car insurance it's a newer user-based type of insurance basically you put a tracking device on your car which records your driving behavior and mileage the then tail is the premium based on how safe you drive and how much you drive big brother is watching you so if you're a safe low mileage driver this might give you a reduction in your premium but if you're not as safe as you want to believe you are it could work against you and lead to a higher premium let's talk briefly about how car insurance was even conceived would it surprise you to learn that benjamin franklin one of the founding fathers of the u.s was one of the forefathers of insurance in the u.s that's right the man who invented bifocals experimented with electricity and designed the lightning rod well of course cars went around back in his day but in 1751 benjamin had another bright idea he formed the philadelphia contributorship who was the first company in their colonies to offer fire insurance in the first year the organization issued 143 fire insurance policies that lasted for seven years well not one of those insured properties caught fire during that time but it did blaze the way for the insurance industry of america and it made a lot of money for old ben but it wasn't until 1897 in dayton ohio that the u.s saw its first automotive insurance policy it was issued by the travelers insurance company to gilbert j loomis for a hundred bucks it protected him if his car killed or injured someone or damaged their property by today's standard the insurance plan was very basic pretty much it is the earliest form of car liability insurance in those days car insurance was optional and rare safe driving wasn't something people cared about in fact anyone could operate a car even if they had no idea what they were doing it wasn't until 1903 that massachusetts and missouri became the first states to require drivers to have a driver's license by 1930 24 states required drivers to have a license yet only 15 of those licenses required a driving exam it wasn't until 1959 that all states required drivers to be licensed and tested the car insurance industry took much longer to become mainstream massachusetts was forward thinking in 1927 it became the first state to require drivers to carry car liability insurance but believe it or not for 30 years until 1957 massachusetts remained the only state to legally require drivers to have car insurance today only two states don't require car insurance and that's virginia new hampshire the latter isn't surprised go figure since it is the live free or die state anyway there's an organization called the national association of insured commissioners according to their statistics car insurance premiums have been rising in the double digits up to 30 in recent years according to aaa the average annual premium for a new car is over 1200 bucks so when it comes to car insurance it doesn't hurt to shop for quotes every several years just in case a lower rate is now available elsewhere and here's a caveat just don't go for the cheapest you should consider the company's financial strength and credit worthiness what's the point of paying the cheapest rate if it turns out the company won't be able to cover you later on or they delay processing your claim in a timely manner but now you tell me is there a car insurance brand you trust and why if you have any funny or horror stories with dealing with a car insurance company please comment below and share if you liked the video please like and subscribe to my channel thanks for your support youtoday we're looking at tricks to cut your car insurance costs we'll also look briefly at how car insurance even became a thing and how it's evolved over the years so hop in and let's get going when you're paying your premium you might have that thought that maybe you can get by without car insurance but when an accident happens or are you glad you have it so how can you protect yourself while minimizing your costs one way to lower your car insurance premium is through discounts for example there's a multiple car discount in general if you have multiple cars and multiple drivers who are related by blood or by marriage and are living in the same residence then you qualify for a multiple car discount let's say you're newly married you and your spouse each have a car but under separate company but you might be able to lower the collective car insurance if you insure both cars under the same company as a married couple or let's say you have a teenage son in that case most likely already paying a bit more because premiums are generally higher for teens but if your son's school grades are b or above or he ranks in the top 20 percent of his class then you should ask your insurance provider if they offer a good student discount many providers offer this for teens and young adults until they turn 25 years old companies reason that high schoolers and college students who are responsible are most likely to be responsible drivers and less likely to need an insurance claim the discount can range anywhere between one percent up to even 39 depending on the company you'll need to provide some proof of eligibility it all depends on the insurer but typically it's an official school transit or report card or maybe sat scores showing they're in the top 20 percent of the national average on a similar note did you know that your credit rating impacts your car insurance rate many folks are actually surprised to learn this the reasoning is similar to that behind the good student discount statistics show that a person with an excellent credit rating is usually someone who is responsible and mature in their personal life and less likely to file an insurance point in other words it means less risk for the insurance company in fact if your credit rating is poor you may be paying 50 or more on your car insurance premium so you might want to see how you can improve your credit rating to good or excellent it'll take time to build up your credit but it's worth it because it'll help you in other aspects of your life too another way to cut your car insurance costs is by qualifying for a multi-line discount for example you probably already have a homeowners insurance or renters insurance so if you can get your car insurance and your home owners or renters insurance to the same company you'll see greater savings for example allstate offers up to 10 car insurance discount and 25 homeowners discount if you bundle them together under their company did you know that you can lower your car insurance premium by paying more attention on the road literally most people know that traffic violations and accidents count against you and can raise your premiums but what many don't know is if you're an alert defensive driver this means less traffic violations and accidents on your record which means you qualify for a good driver or safe driver discount it can range between 10 to 23 depending on your driving history and record consider it a reward for safe driving also did you know that the annual mileage you put on your car impacts your insurance premium in general it's good to ask your insurer how many miles they currently have you on record is driving that's because they estimate this information and if it's wrong by a large margin that means you're paying more than you should so it's good to check it and get that corrected if needed also if you commute as you're driving two to three hours every day your premium will be much higher than someone who commutes to work near their house one way to reduce your premium is to ask your insurer about their mileage threshold if the savings are significant and you're able to reduce your mileage by taking public transportation or the office van pool part of the time that might be worth considering so you may love your vehicle but did you know that the type of car you have impacts your premium let's say you bought your large dream suv unfortunately ensuring a 5 000 pound high-end car is more expensive than ensuring a smaller safer less expensive commuter car also if this commuter car is a hybrid or alternative fuel car you can qualify for further discounts so if you really need to cut your insurance premium and fuel costs then consider downsizing to a hybrid commuter car for example or if you're shopping for a car right now then evaluate insurance costs before you buy the year make and model has a big impact on your insurance rate so it's worth getting the insurance estimate because it can help influence which car you choose from your shortlist but let's say you have an older car well you might want to consider nixing collision or comprehensive coverage the reason is you might be paying more than your car is worth and then if it gets totaled you don't get much money back anyway the general rule of thumb is to add your collision and comprehensive premium costs then multiply it by 10 compare that value with how much your old car is worth right now if your car is worth less than that value it might not be beneficial to get collision or count that's because the average policy holder makes an insurance claim just once every 11 years and reports a total loss once every 50 years another way to cut your insurance costs is to look at your deductible the higher the deductible the lower the premium if you're the kind of person who likely won't file smaller claims anyway because let's say you don't want to risk pushing up your premium for example then it might make sense to raise the deductible in your policy and enjoy a lower premium going from a 250 deductible to a thousand dollars can mean saving between 25 and 40 percent on your pulse then you can set aside those savings to use as your deductible and cover your costs in the event of an accident if you already have homeowners or renters insurance you already know that you can get discounts if you have certain anti-theft devices installed well it's a similar thing when it comes to cars depending on the insurer you might be able to get up to 25 off if you have an anti-theft system in your car each insurer has their own requirements on car alarms and load jacks so you want to ask first before you get it installed some insurers also offer discounts on safety devices like motorized seat belts believe it or not the neighborhood you live in impacts your insurance rate that's because insurers go by the statistics in your local area this includes type and frequency of crime like car theft and vandalism demographics of people and even the type of cars in your locale the algorithm analyzes all those data points to calculate the dollar risk and probability of car theft car accidents and so forth of course most people won't be able to move to another area just to reduce their car insurance but if you're already planning to move it's something to consider for example urban neighborhoods have higher rates of accidents thefts and vandalism in rural areas and therefore higher car insurance premiums so maybe it's time to head for the hills also it is good to ask your insurer if they offer any other less commonly known discounts you might be surprised for example some insurers offer special discounts for military personnel veterans senior citizens teachers employees of certain companies and so forth it never hurts to ask the worst answer you can get is that there are none another tip is to always keep your car insurance act if you even have the briefest laps and coverage it can increase your premium also paying your full premium up front is generally cheaper than paying monthly which can be higher and can come with an administration then there's a thing called black box car insurance it's a newer user-based type of insurance basically you put a tracking device on your car which records your driving behavior and mileage the then tail is the premium based on how safe you drive and how much you drive big brother is watching you so if you're a safe low mileage driver this might give you a reduction in your premium but if you're not as safe as you want to believe you are it could work against you and lead to a higher premium let's talk briefly about how car insurance was even conceived would it surprise you to learn that benjamin franklin one of the founding fathers of the u.s was one of the forefathers of insurance in the u.s that's right the man who invented bifocals experimented with electricity and designed the lightning rod well of course cars went around back in his day but in 1751 benjamin had another bright idea he formed the philadelphia contributorship who was the first company in their colonies to offer fire insurance in the first year the organization issued 143 fire insurance policies that lasted for seven years well not one of those insured properties caught fire during that time but it did blaze the way for the insurance industry of america and it made a lot of money for old ben but it wasn't until 1897 in dayton ohio that the u.s saw its first automotive insurance policy it was issued by the travelers insurance company to gilbert j loomis for a hundred bucks it protected him if his car killed or injured someone or damaged their property by today's standard the insurance plan was very basic pretty much it is the earliest form of car liability insurance in those days car insurance was optional and rare safe driving wasn't something people cared about in fact anyone could operate a car even if they had no idea what they were doing it wasn't until 1903 that massachusetts and missouri became the first states to require drivers to have a driver's license by 1930 24 states required drivers to have a license yet only 15 of those licenses required a driving exam it wasn't until 1959 that all states required drivers to be licensed and tested the car insurance industry took much longer to become mainstream massachusetts was forward thinking in 1927 it became the first state to require drivers to carry car liability insurance but believe it or not for 30 years until 1957 massachusetts remained the only state to legally require drivers to have car insurance today only two states don't require car insurance and that's virginia new hampshire the latter isn't surprised go figure since it is the live free or die state anyway there's an organization called the national association of insured commissioners according to their statistics car insurance premiums have been rising in the double digits up to 30 in recent years according to aaa the average annual premium for a new car is over 1200 bucks so when it comes to car insurance it doesn't hurt to shop for quotes every several years just in case a lower rate is now available elsewhere and here's a caveat just don't go for the cheapest you should consider the company's financial strength and credit worthiness what's the point of paying the cheapest rate if it turns out the company won't be able to cover you later on or they delay processing your claim in a timely manner but now you tell me is there a car insurance brand you trust and why if you have any funny or horror stories with dealing with a car insurance company please comment below and share if you liked the video please like and subscribe to my channel thanks for your support you\n"