July 2, 2010

Extreme Weather And How It Impacts Auto Insurance Coverage

Everyone is looking to save a dollar and it seems like buying cheap auto insurance is everyone's favorite way to save a dollar. The idea is that you buy cheap auto insurance, don't get into an accident and sincerely hope that when you do it's a small accident where the cost isn't high and your premiums don't get raised a ton. But maybe you weren't aware that extreme weather is something that can greatly impact the amount of money you spend on your auto insurance premiums. It makes a lot more sense than you think.

The overwhelming thought when you read that extreme weather can affect your premiums is to question how something you have absolutely no control over can impact you. But when you look at it from a car insurance's standpoint it makes more than enough sense. An insurance company has one job: to keep costs low. The way they do this is by not having to pay out claims. When they have good drivers who don't make big mistakes, it helps greatly. However, weather can be costly for the amount of money they have to pay out in claims.

Let's say you live in an area that gets a lot of hail. If you have ever experienced hail damage then you know it can be pretty severe and could require a heavy amount of body work from the local car garage. This does feel good for the insurance companies and hurts your chances of having cheap auto insurance. They have to pay money on those claims and repair all those cars. The same thing goes for a tornado or hurricane. Anything that happens to your car that you didn't do yourself will make the insurance company have to pay for it and ruin the chances of you getting auto insurance at a more affordable rate.

The other issue is that extreme weather can cause a hazard for drivers on the road. In the case of an area with heavy snow fall, a driver faces the hazards of low visibility and the problem of slippery roads. This can cause real problems for drivers and make their chances of getting into an accident increase. The higher the probability of accidents translates into the higher probability of insurance companies having to pay out claims, which means bigger insurance premiums for you and your family.

Insurance is protection not only for you but for the companies themselves. They don't want to pay more money the same way you don't want to pay more money. But understand that the more extreme the weather, the more it may affect your monthly premiums.