How Wealth Affects Auto Insurance Savings

These days, auto insurance companies offer discounts based on your education, profession and wealth. They don’t tell you they give you discounts because you are rich. But they give discounts because you live in a nice neighborhood and you own your home. Also, wealthier people are more likely to have a perfect credit score that qualifies them for a large discount.

There are studies to show that a well-off motorist who lives in a nice part of the town with his family and homeowner gets inexpensive auto insurance quotes while a single mother who rents struggle to find an affordable deal because she cannot qualify for those tidy savings.

Effects of credit score cannot be ignored either. A rich person doesn’t become rich by accident. He knows how to handle his money and is likely to have a good credit score. Companies offer as much as 25% savings to people with good credit scores.

These revelations may come across as discrimination and many states fought using credit score as a factor in automobile insurance premium calculations. However, the fact is that companies and the studies carried out by some states showed that people with better credit history are less likely to make claims.

How Is That Possible?

This brings us to choices motorists make when they have a legitimate claim on their vehicle insurance policies. Think about a situation where your teenage son/daughter crashes the car onto the garbage cans at home or scrape it on an object on the road. If you don’t have spare money to pay for the damages you have no option but to get your auto repaired with insurance money.

When you have money, you really don’t want to deal with loss adjusters, wait for your auto repairs to be approved and you have to negotiate which garage repairs it. Besides, you don’t get much money after deductibles when the claim is small. I can hear you say why wouldn’t anyone make a claim when they can?

The answer is simple. When insurance companies know that the teenager on the policy just caused an accident, they will shoot up the premiums as much as twice. By having the money to manage your damages and small claims you keep your no claim bonus. This way you make sure that you keep inexpensive car insurance rates for the next three years at least. An accident will remain in your records for at least three years and keep affecting your premiums.

Other Types of Coverage

It is very interesting the way auto insurers calculate premiums. Essentially, the more you buy the lower your rates get. For example, you pay $1,500 for a basic policy with liability, comprehensive and collision coverage. And you only pay about $1,800 for a fully comprehensive coverage that will offer you protection against uninsured motorists, legal defence, unlimited travels abroad, courtesy car when yours is in the repair shop after an accident and much more.

The problem is that when money is tight you automatically worry about adding those extras because of costs. But when you are not scared to ask extras, you get many good covers thrown in for almost nothing. It is the mentality that helps you get covered better. You are not scared of asking for more and companies are happy to offer it to you, especially when you have more than one car, home insurance and other policies with the same company.

Furthermore, people with money are more likely to have a good level of health insurance compared to people on a tight budget and not keeping a stable job. If you have good health insurance you may not need Personal Injury Protection. Otherwise, it would be highly advisable to buy this cover as well.


Thinking freely (without money restraints) allows motorists to arrange better automobile insurance coverage. Furthermore, it makes it easier for you to qualify for several discounts. You really don’t need to be super rich to take advantage of these benefits. Many people live in nice homes that they own and have good credit scores. Take advantage of every possible discount and don’t be scared to ask for more. 

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