December 12, 2010

Climate Changes And How They Can Affect Auto Insurance Rates

There are many factors that insurance companies consider when putting together a quote for an auto insurance policy and the climate changes of the area you live in tend to be forgotten. Although there isn't much you can do about the weather in your area, it is important to know how it will affect your premium.

In parts of the country that receive a large amount of debilitating weather, you may be practically required to add towing coverage to your auto insurance policy so you don't find yourself stranded in inclement weather. Insurance companies will know this and more than likely charge more for that extra benefit than they would otherwise. Harsh road conditions raise the odds of drivers being in accidents while driving which means higher odds of the insurance company having to cover you. When a driver is seen as a risk to the insurer, the rates will be higher. Similarly, residents near the Gulf of Mexico would be remiss if they did not opt for a comprehensive policy that covered flood damage which will also be more costly.

It will also be harder to shop for an auto insurance policy right after a large disaster. For example, after Hurricane Katrina, many insurance companies were making very large payouts and this could be reflected in their insurance quotes. Because of the climate changes, they were less willing to take on new insurers at the same rates they were offering previously. This will be the most profound way that climate changes the cost of an auto insurance policy, directly after a major weather disaster. You can shop around to find the most affordable quotes from various competitors but if you are in that area, you should expect to be looking at quotes higher than you would otherwise expect.

If you get involved in an accident related to the weather, your rates will rise the next time your insurance company reviews your insurance policy. Even a claim pertaining to vehicle damage caused by weather such as hail can cause a hike in your insurance and you will need to weigh the costs of repair over the likely increase in your premium. The best way to avoid this is to keep your car off the roads during inclement weather and make sure it is safely stored.

You can sometimes receive a discount by proving that your vehicle is prepared for harsh weather conditions. For example, if you live up north in a part of the country that frequently sees snowstorms, then by showing that your car has tire chains installed to protect yourself and your vehicle during a blizzard, you could possibly become eligible for a discount.