Business car insurance does not come cheap and finding a good deal can be next to impossible if one is not willing to do their research. How can you get a policy whose premiums are affordable?

Insurers won’t tell you what they consider when determining the amount of premiums you should pay. Fortunately, industry experts have spilled the beans. When you know the factors that affect your premiums, you will be able to negotiate for a better deal from your insurer and find the absolute best car insurance rates. Below are some of the things that affect your rates:

1. What Type of Car do You Want to Insure?

One of the things that determine your rates is the type of car you are insuring. The Insurance Services Office has a system that rates every car make and model. This system considers the cost of the car and then weights it against theft data records of the model. Another factor that is considered in the system is the safety of the car. Each car is given a rating of between 1 and 27. Those with higher ratings attract higher premiums than those with lower ratings.

Tip: Before you buy a car for use in your business, you should ask your insurer about the different rates for the models you are considering buying. Find out from online sources which cars are expensive to insure and those that cost significantly lower.

2. You Cannot Get a Good Deal if You Have a Tainted Credit History

Before your premiums are determined, the insurance company will most likely look at your credit history. Actuarial scientists have found a direct correlation between credit history and the likelihood of a person filing a claim. If your credit history shows that you have been paying your bills on time, this indicates that you are more stable than a person who is constantly late in paying his bills and has a lot of credit cases. This information if used by insurance companies to determine an applicant’s “insurance risk score”, which will then be used to classify you as a high, medium or low-risk applicant.

Tip: The insurance-risk score is usually not given out to individuals. However, it may be comparable to your credit score. If your credit history has been shaky for a while, it is a good idea to postpone your decision to buy a car for some time as you make efforts to clean it up.

3. Installment Fees Constitute a Larger Part of Your Premium

Whenever you pay your annual premium in installments, you are usually charged a “fractional premium”. Regardless of whether you are paying your premiums on a monthly, quarterly or six-month basis, the insurer will charge an extra fee to cater for administrative cost. This means that the more you pay in installments, the more your fractional fees will be. Find out from your insurance company the fees charged for paying installments. Sometimes, they may be small enough that you may not feel the pinch.

Tip: Make sure you pay your premiums on time to avoid having your policy canceled. Some insurers may not give your adequate notification before they cancel your policy. Paying the installments upfront may simplify the process.

4. Do You Have any Flaws in Your Driving Records?

Your driving record will also affect the amount of insurance you will pay. After your first at-fault accident, your premiums are likely to be increased by 40 percent of the base rate offered by your insurer. For example, if the base rate is $500, your revised premium will be $200 more than your initial payments. Most insures have an in-house standard of determining the amount you should pay. Regardless of the method they use, you are certain to pay higher premiums after an accident.

Tip: If you get involved in an at-fault accident for the first time, find out whether your insurer can write off the first accident. Some insurers also consider the extent of the damage caused during the accident. If you are lucky, you may be forgiven if your accident was not a major one.

5. Claim For “Diminished Value” For Your Car

A car that has been in an accident and repaired may not be comparable to a similar one that hasn’t been in an accident. Although this notion is not accepted in all states, at least 14 states agree with it. In these states, you can file a claim from your insurer for the lost value. In other words, you are excluded from paying the same premium like a person with a similar car that hasn’t been involved in an accident.

Tip: The states that allow diminished-value payment include West Virginia, Washington, Virginia, Texas, South Dakota, North Carolina, Massachusetts, Maryland, Maine, Louisiana, Kansas, Hawaii, Georgia and Florida.

6. When You Switch Your Insurance Company, Cancel Your Previous Policy Formally

Most insurance companies stipulate that you can cancel your policy anytime by way of writing. However, many people simply terminate their policy at the end of the coverage period and assume this will be reflected at the insurance company. This ignorance will make you pay dearly as your insurer will still send you a bill for your next premium. If you fail to pay this bill, the company will terminate your policy for non-payment and this will in turn be reflected in your credit records.

Tip: Call your agent to inform him you will be canceling your policy on a particular date if you want to switch insurance companies. The agent will arrange for your insurer to send a cancellation request form that you will have to fill and sign for the cancellation to be officially effected. Go through the form and check whether there are any errors before you put your signature on it.

Other Factors That Affect Your Business Car Insurance Premium

Apart from the above, there are other things that insurers consider such as where you park your car at night, the crime rate in your area, safety features installed in your car, your age and school grades if you are a student, the type of cover you want to take, the annual average mileage you cover among others. Find out how you can reduce your premiums by considering these factors and searching for cheap car insurance quotes.

The above are some of the ways through which you can save on insurance costs. Your insurance company will not give you ideas on how you can get a good deal as they want to squeeze as much money as they can from you. Your insurance agent may be in a better position to recommend measures you should undertake to reduce the amount of premiums you will pay.