Affordable Automobile Insurance

Knowing more about car insurance policies is one of the best ways of saving money. It’s only by knowing more about your auto insurance policy will you be able to understand whether you are saving optimum amount of money or not. May be you are over spending on your car insurance but you don’t know it yet.

Even if you are a high risk driver driving on the roads of California, you can still save money on your car insurance. Here we have to start by understanding why you have been categorized as a high risk driver. Either you are a new driver or your driving record is not clean enough, whatever your reason, you can repair the situation. Start by comparing quotes from different local insurance companies. There are many insurance companies in California which treat high risk drivers as their target market because most companies consider them very risky. Find out which discounts you qualify for and apply for them, and work towards qualifying for other discounts.

Some time ago, if you paid for the rental car through your credit card, the credit card company would pay for your rental car insurance. The situation has largely changed over the years. You will have to separately contact your credit card company whether they offer this policy anymore or not. The other option is to contact your current car insurance company and find out whether they can add rental car insurance to your current insurance policy or not. You will have to work on this separately by calling these companies.

California has put forward its own requirements about assuming financial responsibility for driving on the roads. In many states, even if you don’t buy an insurance policy and deposit more than $30,000 in the state treasury, this amount is treated as your financial responsibility. Since every driver cannot afford to pay so much money to the treasury, they instead purchase automobile insurance.

Auto insurance rates for Ontario drivers are likely to soar skywards in the coming months, though the government says it is going to address the issue of hike in auto insurance premiums. Recently the Financial Services Commission of the state approved rate change proposal for many insurance companies. The commission’s report states that the average increase in insurance rates over first three quarters of 2009 were 6.2%.

According to a newspaper report, premiums may actually go up by average 9.1%, whereas Toronto alone will experience premium increase of about 14%. Insurance companies say the rates are rising because of rising rehabilitation and physiotherapy costs for accident victims.

A number of recommendations have been made to control the rising insurance costs. One such proposal states that minor injuries cover should be kept limited at $25,000. Government is making attempts to consider other proposals which will help strike an adequate balance between insurance affordability for drivers and protection.

There is still some time to go before the state budget is presented, and till that time people will have to struggle with fast increasing automobile insurance rates. About ten automobile insurance companies have already been allowed by the regulatory agency to increase their insurance rates in the last year. These companies cover about one fourth of Ontario automobile insurance market.

If one looks at some extreme examples, insurance premiums may increase by as much as 30% in some cases, depending on driving record, insurance company involved and community. In Greater Toronto alone, the average car insurance premium was $1682 in 2007, whereas now it has increased to $1917 in 2009. The Insurance Bureau of Canada says insurance premiums are calculated by factoring cost of claims and investment income generated after the premium is received. Other things that are factored include taxes, selling costs, overheads, account settlement costs and reserved funds.