All motor vehicle drivers, registrants and owners are required to have Michigan no fault insurance in Michigan. Car insurance is mandatory and sometimes can be expensive, so there are things you want to avoid doing to protect the cost of your auto insurance coverage. Keeping a points free driving record is one way to lower insurance rates.
In Michigan, auto insurance companies are prohibited from using sex, marital status, home ownership, credit score, educational level, occupation, and zip codes in setting rates. (MCLA 500.2153).
However, there 10 other ways you could mistakenly cause your car insurance rates to go up. Here are some common mistakes to avoid making in order to keep your rates lower and stay off the insurance company’s rate increase list.
1. Avoid Bad Credit Score: Michigan now prohibits the use of your credit score to increase insurance rates. See (MCLA 500.2153). Previously a car insurance company used your credit score to predict if you pay your car insurance bill on time. Your insurance rate was higher if you had a bad credit score. Now its illegal for an insurance company to use your credit score to increase you car insurance rates in Michigan.
2. Avoid Getting Tickets. Insurance companies will look at your driving record to determine the kind of risk you present for car accidents. If you have a bad driving record your rates go higher.
3. Avoid Letting your Car Insurance Lapse: Although it can be tempting during periods of time where you don’t drive often, you should not cancel your car insurance. Do not drive your car if your insurance coverage has lapsed. A lapsed policy provides zero coverage. Change your policy to a storage policy If you are storing your vehicle. If you cancel your car insurance and then reinstate coverage a few months later, your insurance carrier may raise your premium because it views you as a higher risk driver.
3. Avoid Withholding Information About New Drivers: If you have a newly licensed teen in your household or a new household member who started driving your car on a regular basis, your insurance company needs to know about them. If someone driving your car regularly is not listed as a driver on your car insurance, and they get in a car accident crash, you are liable under the owner’s liability statute. your insurance carrier will not like learning about new drivers after a car accident. New driver coverage is more expensive. Car insurance company may try to void your policy under certain circumstances.
4. Avoid Letting Someone Take Your Car to Live In A New State: Remember that different states have different vehicle registration requirements. Insurance companies view more risk when your car goes away from your home state. Your insurance company needs to know when your vehicle is being used out of the registration state for a prolonged period of time. You should not let someone take your car out of state, or at the very least inform your insurance carrier that you are letting someone use your vehicle to move out of state.
5. Avoid Financing and Insuring a Car for Someone Out of State: State have different rules and regulations for car insurance. Although, your Michigan auto insurance policy has language that will conform to another states required insurance coverages, it can get complicated if you are a nonresident insuring a car in another state. Try to avoid this situation.
6. Avoid Lending Your Car for Extended Periods of Time: You will be liable if you loan your car to another person and that person causes an injury accident. Instead of loaning the car and hoping your insurance carrier will never find out, make sure you add the person you lend your car to as a driver or find out if the person can insure themselves on your vehicle’s insurance policy. Make sure you follow the insurance laws where the vehicle will be primarily driven.
7. Avoid Carrying Insurance Even After Selling Your Vehicle: After you sell your vehicle, the new owner must get their own car insurance. You should never accept payments for car insurance to keep coverage on the vehicle you sold.
You could be liable to the driver who is paying if something goes wrong. If that driver is your child, you may be able to keep insurance on the vehicle even after the ownership change. Keep your insurance company informed about any changes in ownership to be safe.
8. Avoid Commercial Use Of A Personal Vehicle: You should never use your personal auto in business without the proper business use auto insurance policy. For example, if you use your personal auto as an Uber driver or make food deliveries, you must insure your car as a commercial vehicle since it is being used for business purposes. You will avoid a serious coverage problem should an accident happen. Get commercial coverage to make sure you get a busines use rate, instead of using your personal car for business use without the proper insurance coverage.
9. Avoid Not Telling Your Insurance Provider about a New Car: Before you purchase a new car, you should immediately inform your insurance company about the new vehicle. Your insurance will not cover a new vehicle it does not know about.
10. Avoid Letting Excluded Driver To Drive your Vehicle: If someone is an excluded driver on your car insurance, they cannot, under any circumstances, be driving your car. You will not have any coverage if an accident happens. If you want to allow an excluded driver to drive your vehicle, make sure to change the status to a driver before they get behind the wheel of your car.
Avoiding making these mistakes to ensure that you have car insurance coverage and the best car insurance rates possible.
If you or family member have been involved in a car accident injury crash, and you wish to make a car insurance claim on your policy, Call us today at 248-352-2110 or toll free at 866-HIRE-JOE for a free consultation. The Joseph Dedvukaj Firm is Better Business Bureau A+ rated.
