Georgia Car Insurance: Factors that Affect Car Insurance Rates

By Insurance.com Posted : 02/07/2007

If you are a driver in Georgia (or anywhere for that matter), you know how complicated and confusing it can be to file a car accident claim, switch car insurance companies or simply add a person on to your policy. To help make things easier when dealing with your auto insurance company, we have listed some helpful tips for Georgia car insurance customers below. Understanding these items can not only save you a lot of time and money on your Georgia auto insurance, but it will also help you be better prepared in the event of a car accident.

1. How your Georgia car insurance company determines your car's value after it has been declared a "total loss".
When totaling your car, your insurance company's goal is to help you find a new car within the same market. To do this, car insurance companies use three different methods for determining the value of the car declared a total loss, such as:

If the car insurance company is unable to find a car from within your area, they may have to find a replacement car outside your zip code, which can dramatically affect your car's true value. For instance, if you reside in a big city within Georgia, such as Atlanta, Marietta or Augusta, then the cost of replacing your car will likely be more expensive then if you lived in a suburb or more rural part of Georgia.

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2. Making a car insurance claim could increase your rates.
Typically, insurance companies raise your car insurance rate by 40 percent in the event of an accident. However, some insurance companies will only increase your personal rate as opposed to your entire rate, but that is at the discretion of the insurance company.

If you are a good driver that does not have any driving violations, then you will want to consider going with a car insurance company that offers an "accident forgiveness" or "forgive the first accident" policy. This will help keep your insurance premium from fluctuating in the event that you file a car insurance claim.

3. Your credit score does more than affect your credit, it can also affect your car insurance rate.
That's right; your credit score can impact how much you will pay for car insurance! Think it is not fair; well many insurance companies tend to disagree! Studies show that there is a direct correlation between your insurance risk score and the likelihood that you will file a car insurance claim. Your insurance score is used to evaluate your stability as a driver. So if you pay your bills on time, are in good standing and have a long standing credit history with lenders, then you will be more than likely be consider a dependable person. However, if you tend to pay your bills late, open and close credit frequently and are in poor standing with creditors, then you will likely be considered an unstable person and a potential threat on the road.

You can improve this "poor standing" by starting to pay your bills on time and establishing a good history with lenders. One way to start down this path is by contacting a free credit counseling service for guidance such as Consolidated Credit Counseling Services, Inc.

4. When switching car insurance companies, you must cancel your insurance policy first.
Though it is possible to cancel your coverage at anytime, it is important to note that many insurance companies require a written statement, including the date of termination, in order to officially close your car insurance policy. If you do not do this, and you receive and ignore the next bill, your policy will be canceled automatically by the insurance agency for delinquency of payment. The downside to this automatic cancellation is that it will show up on your credit record, which could potentially impact your credit score!

The safest thing to do when switching car insurance companies is to call your company and let them know that you are canceling your policy. The company will send you a cancellation request that needs to be filled out and sent back.

5. Adding a teen to your car insurance policy.
Most insurance companies do not require you to add your teen to your car insurance policy when they are a certain age, only when they receive their license. On the other hand, if you are in a high-risk pool, you may be required to add them when they receive their driver's permit. If you forget to add your licensed teen, and they are involved in a car accident, they will be covered; however, your insurance company may charge you back premiums from the date your teen received a license.

For your Georgia teen to begin the process of receiving their license, they must complete the following steps:

  1. Pass the Driver Education Course to receive a Driving Eligibility Certificate.
  2. Present the Certificate to get the Step 1: Learner's permit.
  3. Practice driving with a parent or guardian supervisor in the passenger seat.
  4. Complete required amount of in-car practice.
  5. Take and pass the Alcohol & Drug Awareness Program.
  6. Receive Level 2: Class D license.
  7. Practice driving without a supervisor.
  8. Receive Class C license at 18 years of age (or upon renewal).

This process is for first time drivers who are at least 15 years old. To ensure that the teen driver receives ample time to practice and to offset the number of accidents that involve teen drivers each year, Georgia has adopted a graduated licensing system called Teenage & Adult Driving Responsibility Act (TADRA) which includes:

Step 1: Learner's Permit
Parent or guardian must sign for the teen's driving permit after proof of residency and social security have been authenticated. The teen must also provide a Certificate of Attendance, which shows that the teen is currently attending school (or proof of graduation). In addition, Georgia teen drivers must always be accompanied by a licensed driver when they are behind the wheel.

Step 2: Class D License
Teens are eligible for a Class D license when they are between the ages of 16-18. They must pass both the written and the driving exam, and have had their learner's permit for at least 12 months. They must also have completed 40 hours of in car driving, six of which must be done at night. This level of license carries restrictions, such as no driving between 12am-6am, for the first 6 months, no non-family members in the car, and after 6 months, only 3 passengers under 21 years of age are permitted in the car at a time. A final requirement before they receive their Class D is that they must take and pass an Alcohol Drug Awareness Program. In order to receive their Class D license, Georgia teen drivers must present their Alcohol Drug Awareness Program certificate to their local DMV.

Step 3: Class C License
A Class C license is issued to those who are over 18 and have passed the written exam and driving test, or after having had a Class D license. To receive a Class C, your record must be clear of any traffic convictions for the previous 12 months.

To learn more about Georgia teen driver laws and regulations, please visit the Georgia DMV

6. Paying in installments may increase your car insurance.
"Fractional premium" fees are usually charged when you divide your car insurance annual premium into installments. Six month, quarterly or monthly are the typical breakdowns for most insurance companies. Generally, the more you break down your installments, the higher the administrative/fractional premium fees are. Always ask when applying for a new car insurance policy, and see exactly what the fees are for each payment you break down. Make sure to also ask your insurance provider if they offer an alternative way to make payments, such as Automatic Clearing House (ACH) processing, which withdrawals the funds right from your checking account. This may help eliminate processing fees while helping you stick to your budget.

7. How much does your car model affects your premium.
The auto insurance company premium rating system for cars is on a scale from 3 to 27. The ratings are established by the Insurance Services Office (ISO), and the higher the number of your model, the higher your premium will likely be. These numbers are only available to auto insurance companies - so, no luck trying to find out your car's number before you purchase your car. But you can contact your insurance company for a quote to gain an idea of how much it will cost to cover your new wheels.

8. Paying for someone else's bad driving.
If you loan your car to someone and they end up crashing it, you will have to file a claim with your car insurance company. As a result, you will have to pay your deductible (or any that apply) and your rates could potentially increase your car insurance rate. If your car is taken without permission, you are typically not held liable. If the driver is uninsured and causes damages exceeding your policy limit, the injured party may come after you for medical or property-damage expenses and not your friend.

9. Personal property in your car is not covered by your auto insurance.
Stolen or damaged items from within your car are not covered by your auto insurance policy. Most policies will only cover smaller and less expensive items like CDs, but if you carry more expensive things, you will want to consider adding a rider to your home insurance policy. Keeping photos or video of your items is also a good idea. If something is stolen from your car, you may have to file a claim on your home insurance if you do not have a rider in place.

Even though most states typically have similar laws in place for car insurance, they do not typically have similar car insurance rates. That's because Georgia car insurance rates are influenced by Georgia's geographic location and its state laws. With that being said, it is always a good idea to shop around and compare the rates of various auto insurance companies. To assist you in the process Insurance.com offers an auto insurance comparison application. Here, you will be able to evaluate multiple rates from best-in-class insurance providers - helping you find the cheapest auto insurance coverage for your budget.

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