6 Hidden Truths About Car Insurance

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According to a recent special investigation by Consumer Reports, "the way insurers set prices is shrouded in secrecy and rife with inequities." Here are the 6 hidden truths that Consumer Reports revealed.

1. Your credit score-- more than your driving habits -- can determine your car insurance premium. Car insurers check your credit scores to try to predict whether you will file an insurance claim. If they think your credit isn't high enough, then they will charge you more for car insurance.

2. The insurers profit from accident you my never have. Since insurers are charging more to people with less than excellent credit, consumers with less than excellent credit are paying for accidents that may never happen.

3. You'll be charged more if Big Data says you won't notice. This price optimization is luckily not allowed in Vermont.

4. Adding a teen driver can cost a fortune, but it does not have to. If you shop around, you should be able to find an insurance company who will offer your teen insurance at a reasonable rate. Do not just add the teen to your current insurance policy without pricing coverage with several companies.

5. Promised discounts may never materialize. Many company offer discounts for things like bundling insurance (auto and home), good grades, or installing anti-theft equipment. Often these discounts are not significant or never materialize.

6. Longtime loyalty to a company may work against you. It is common to stay with the same insurance company for many years but that loyalty may be costing you money in the form of increased premiums.

For more information about car insurance pricing and Consumer Reports' investigation, go to: http://www.consumerreports.org/cro/car-insurance/auto-insurance-special-report/index.htm.