Car Insurance Advice

Car Insurance Advice

Learn essential advice on high rates, rate increases, final quotes, rate reduction, and our re-run feature.

What are the three main reasons why my insurance rates are likely to be high?

Auto insurance rates have risen in the past year for everyone, but if your rates are higher than expected, it is likely that you fall into these categories:

a) Low Credit Score: This is the main reason why people have more expensive insurance. 28% of OCHO customers either don’t have a credit score, or not enough data to generate one. For the remaining 72%, the average FICO score is 543. As a result of this, you will see higher rates. 

b) Incomplete Insurance History: The majority of OCHO customers don’t have continuous coverage, especially in the last 12 months. This can be from missed payments.

c) A Foreign Driver’s License: Some of our customers hold a foreign or out of state driver’s license. This increases your rate.

It’s important to us that you understand the reasons why your rates are higher than expected. The reasons listed above can all be fixed over time. We want to see that extra money in your pocket, rather than in the hands of the insurance company. 

Why have insurance rates gone up so much in the past year?

The main reason auto insurance rates are increasing is because the cost of repairing your car after an accident has risen significantly - due to inflation and global supply chain problems. 

This means auto insurers now pay significantly more for covering the cost of your car damage, even if the amount of people having accidents stays the same. To offset these higher costs, they are raising your rates.

From January to August 2023, more than 30,000 people have applied and received quotes through OCHO, resulting in over 200,000 total quotes. 

The average initial quote for someone looking for basic, "liability only” coverage increased by 43% from $746 in January 2023 to $1064 in August 2023. 

The average initial quote for someone looking for “comprehensive and collision” (C&C) coverage, (which is required for someone with an auto loan or lease), increased by 54% from $1416 in January to $2178 in August.

Despite these increases, OCHO's job is to find you the best rates and, with OCHO Pay, to help you afford these higher rates by allowing you to spread your policy amount evenly into twelve smaller payments over six months. 

If you’d like more information on this, we did a deep dive in our blog, you can check it out here

We also highly recommend reading this article by The Washington Post for a deep dive into the rising costs of auto insurance in the US.

Why is my final rate higher than my first quote?

This is important, as it’s a misleading and frustrating part of buying insurance. You get three quotes per company when buying insurance. One with the information you enter yourself, one with information the insurer will pull, and finally the price the carrier provides when you bind. 

Your first quote with most insurance companies and marketplaces will not be accurate. It may even seem cheap.

The problem is, your first quote will never be accurate until insurance companies can verify your complete information. This includes details like your entire driving history, any extra cars or drivers you wish to add, your previous insurance coverage (including any gaps), and your credit score. 

Completing the process to the final quote is essential to make sure it is accurate.

You may look on several marketplaces at once, and choose an option that looks the cheapest, only to find that by the time you get to the final quote, it’s now much more expensive. 

According to our own data, the first quote actually decreased at the final quote stage. This is a pretty low percentage. We have worked to make our system as accurate as possible, so you don’t get a nasty surprise by the time you’ve entered all your data and are ready to pay. 

If you use an insurance marketplace that isn’t OCHO, you will likely never pick the lowest priced option. This is because all rates go up, and you don’t know if the carrier that looked good on the first set of quotes is still the lowest priced carrier based on their final price. 

Besides our more accurate system, we have a re-run feature. We automatically check for a cheaper final quote for you too. If one is available, we will offer it to you. We are one of the very few companies that offers this apples-to-apples comparison. It’s because we genuinely want to find you the best deal.

What can I do to lower my rates?

To lower your insurance rates, start by addressing the 3 biggest reasons why you and others are likely paying more, namely: 

(a) You don’t have consistent prior insurance, meaning no lapses in coverage or reinstatements for any reason.

(b) You don’t have a credit score or you have a low credit score.

(c) You don’t have a valid driver’s license in the state where you live.

Tips to lower your insurance rates:

  • Maintain consistent insurance coverage with no lapses for at least the last 12 months.
  • Improve your credit score by getting your auto insurance with OCHO and paying on time.
  • Hold a valid driver's license in the state you live in.
  • Make all insurance payments on time to improve your credit score and future rates.
  • Safe driving is essential to prevent accidents and tickets that raise rates.

To sum up, lower rates are possible if you make payments on time for a whole year and don't have any accidents or claims.

What if I don’t like my final insurance quote?

If you find the price goes up a lot when you receive your final quote, don't worry. You can use our re-run feature to check for a better price, a function traditional agencies don't offer. We do things differently at OCHO! 

You don’t have to do anything, if a cheaper option is available, we will suggest it to you. All you have to do is answer a few more questions to finalize the quote. Then, you will be shown a final screen where you can still choose between the first and the second quote. We’re here to help save you money!

Why is having a steady insurance history so important?

Have you ever had car insurance, missed a payment, and had it canceled? If you went without insurance for a while before getting it again, it's called spotty prior insurance. This on-and-off behavior can increase your insurance rates as insurance companies see you as a risky customer who may not pay them on time. 

Staying insured is super important. It not only keeps you financially protected in the event of an accident, it reduces how much you pay for your car insurance over time. OCHO helps by letting you make smaller payments every two weeks, matching your paycheck schedule. The idea is always to stay insured and not miss any payments. If you must miss one because of a job loss or a family emergency, ensure you reinstate your insurance, which means your policy is active again.

Check your coverage details for info on your policy and reinstatement. It can vary depending on your policy and the insurance company. After canceling your policy, the insurance company gives you about 30 days to reinstate it. You might have to pay any outstanding payments. Reinstating is good because it's like you never had your insurance canceled, and you stay insured. But be aware it can come with a cost. Some companies charge reinstatement fees. The best thing is to avoid those fees by keeping up with your payments and staying insured.

If you would like even more information about gaps in insurance, check out our in-depth blog on the topic.

My insurance is canceled - what next?

Considering getting a new policy with us? Here are 6 reasons why it’s a great idea:

  1. You can only get a lower down payment, split payments, and more time to pay through OCHO!
  2. Talking about more time to pay- do you know why it’s so important? Having your insurance canceled costs you time and money in the long run. Once you have canceled insurance, insurers don’t trust you as much and can put your rates up. If you buy your insurance with us, we’ll give you a few extra days to make your payments free of charge!
  3. It’s illegal in almost every state to drive without insurance. 
  4. If you are in an accident you will have to pay the costs out of your own pocket. That could be a financial disaster. 
  5. It’ll be faster because we already have your information!
  6. We are rapidly expanding and adding new insurance companies all the time. That means offering you more options and better deals!

Come back and take a look at our offers, we’re excited to serve you again!