If you are looking to save on auto insurance, you are not alone. Insurance can cost a lot of money. The amount of your bill is dependent upon which insurance company your policy is with, your age, driving record, where you live and what kind of vehicle you drive, as well as other factors.
Sometimes it can be frustrating to wonder where your premium dollars are going, especially if you have made few or no claims. You need to have insurance, though. It is required by law in the United States, and many other countries in the world.
While it is something you need, it is possible to save on auto insurance if you do a little research and are careful. Even though insurance companies are regulated by the insurance commissions of the states they conduct business in, the exact same coverage can cost different amounts depending on which insurer is selling it.
With that being said, here are ten things that can help you save a lot of money on your automobile insurance bill.
Top 10 Ways to Save On Auto Insurance
# 1: Shop Around
First off, shop around. This sounds like common sense, but believe it or not, many people buy automobile insurance from a company recommended by a friend, family member, or co-worker.
Many young drivers just stay with their parents’ insurance company. It may be convenient to do that, but do you really want to pay for that convenience or do you want to save on insurance?
Get at least three different quotes from three different companies. Do your own leg-work and do the calling or obtain the online quotes yourself.
Contact the actual insurance company that you want a quote from; simply ask “how do I save on auto insurance with your company? Do not rely upon one company to tell you what another company would charge.
Keep in mind, however, that price is not everything. Pick an insurance company with a good reputation, one that you feel you can feel comfortable with, and one that has a good A.M.Best rating, an indicator that the insurance company will be around to pay your claim when you need it.
Prices differ from company to company, so it pays to shop around.
Get at least three quotes, from both different insurance companies and different types of insurance companies—that is, those that sell through their own agents; those that sell through independent agents; and those that sell directly to consumers via the phone, an app or the Internet. Ask friends and relatives for their recommendations based on their experiences, and do your own due diligence by researching the company before committing.
Source: Insurance Information Institute
# 2: Be a Safe Driver
Next, be a safe driver. It is essential to keep a clean driving record if you want to be considered for premium discounts, and sometimes even any coverage at all. A clean driving record means no accidents and no moving traffic violations. This is the best way to get a good price and save on insurance.
So if you’re a lead foot, ease off the gas a little bit and follow the law.
Traffic tickets and accidents drive up car insurance premiums. If you get a ticket, you may be offered the opportunity to go to traffic school to get it dismissed or reduce the number of violation points that go on your driving record. If you can keep the violation off your driving record, the time spent in class could save you hundreds of dollars over several years.
# 3: Drive the Right Automobile
Third, consider the vehicle that you drive carefully. Insurance rates are greatly affected by the type of vehicle being insured.
Do you really want to pay the higher premium to drive that high-performance sports car? If you do, and you can afford it, that’s great. Even if you drive that high-performance vehicle like a Saint, it is still more tempting to a car thief.
Also, new vehicles cost more to repair, so they typically cost more to insure. To save on insurance, consider driving a more sensible vehicle.
The type of car you drive has a significant effect on car insurance premiums. In one study on the least and most expensive cars to insure, annual rates ranged from $1,112 (Honda Odyssey LX) to $3,835 (Mercedes S65 AMG Convertible).
# 4: Monitor Your Credit Report
Keep an eye on your credit report. Make sure to keep your rating as high as possible.
An insurance company considers your credit history when determining your rate because there is usually a correlation between a person’s credit history and the risk that they will pursue a claim.
Paying your bills in a timely manner and avoiding unnecessary credit cards can help your credit rating.
One tip that most people don’t know is to raise your credit score, and it can lower your auto insurance premiums. In fact, your credit score plays a major role in how much you have to pay for your car insurance. If you want to save more money on your insurance coverage, you’ll need to raise your credit score.
Luckily, there are several easy ways that you can raise your credit score, it won’t happen overnight, but it could have a huge impact on your insurance policies. The best way to do that is by simply paying all of your bills on time without missing any payments or defaulting on any loans.
Source: The College Investor
# 5: Review Your Coverage
Next, take a look at your coverage. Some insurance coverages are required by all states, such as liability coverage and possibly uninsured/underinsured motorist coverage.
Look at the rest of the coverage; do you really need rental car reimbursement if you have another vehicle or acceptable public transportation available to you?
If you already have good health insurance, do you really need the first party Medical Payments coverage or Personal Injury Protection coverage? Remove anything that you can consider superfluous (and is not required by law).
The only kind of auto insurance that’s required by law is liability insurance, which pays for injuries and other damage you cause to other drivers. However, many drivers choose to pay extra for other types of coverage. For instance, collision coverage pays for damage your car suffers in an accident. Comprehensive coverage pays for loss due to theft and other types of damage, such as storm damage or vandalism.
This extra coverage can be quite expensive. Research has found that adding collision and comprehensive to an insurance policy increases the cost by anywhere from $600 to $2,000. In many cases, that’s more than half the total cost of the policy.
# 6: Consider Removing Collision Coverage for Older Vehicles
Consider removing the collision and comprehensive (other than collision) coverage from your policy if you drive an older vehicle that is worth less than a couple thousand dollars.
Otherwise, you will most likely pay more for the coverage than you will ever collect. Vehicles worth little money can be considered a total loss even with seemingly minimal damage.
It is easy to find out what your vehicle is worth by checking the Kelly Blue Book, or with a local dealership or even your bank. Then make your decision accordingly.
If your car is old, remove collision coverage and just go with liability coverage. My rule of thumb is that if a car’s cash and/or trade-in value approaches $1,000 (or less), you should just go with liability coverage. A car in that state is nearing the point of replacement anyway, so if you get in an accident, it’s probably going to simply need replacement and the cash value of the car is negligible – you’ll probably not get much less selling it for scrap. So don’t throw out good money in this situation – move to just liability coverage.
Source: The Simple Dollar
# 7: Review Your Deductibles
If it makes sense to keep the collision and comprehensive coverage on your vehicle (especially if you have a lien-holder), take a look at the deductibles on those coverages. The higher the deductible is, the lower the cost of the insurance will be. Just be sure that you will be able to handle that deductible if you ever need to.
When selecting car insurance, you can typically choose a deductible or the amount of money you would have to pay before insurance picks up the tab in the event of an accident, theft or other types of damage to the vehicle. Depending on the policy, deductibles typically range from $250 to $1,000. The catch is, generally speaking, the lower the deductible, the higher the annual premium.
Conversely, the higher the deductible, the lower the premium. Ask your agent how your premium might be affected if you raised your deductible. It may make the annual premium better by several percentage points and put some money back in your pocket, or the savings may be minimal.
# 8: Drive Less
Don’t drive so much. Hear us out. This might seem like a difficult one, but it really isn’t. Car pool with friends or co-workers, use public transportation, or simply run all of your errands on the same day.
Not only will you save on your insurance if your mileage is lower than the insurance company expects, but you will save gas money too.
Are you an infrequent driver? Then, tell your insurance agent about it. Less time on the road means less opportunity to get into an accident, and this often translates into a lower premium for you. Are you a carpooler? Then, be sure to mention this as well. There’s more than one way to earn the low-mileage discount.
Source: the balance
# 9: Check for Safety Discounts
Look into available discounts for safety or security features on your automobile. Most insurance companies will offer discounts on vehicles equipped with such features as air bags, anti-lock braking systems, automatic restraints (seat belts), and alarms and tracking systems. Such features reduce the risk of claims, both for vehicle theft or damage as well as injuries to the occupants of the vehicle.
If your vehicle is equipped with safety features — like factory-installed airbags, dashboard cameras and more — you could get a discount on your policy. Just ask your agent to see if you’re eligible.
Source: American Family Insurance
# 10: Ask About Additional Discounts
Finally, ask about any other discounts that the company might offer. If you are working off the company’s website and it is not clear what you might qualify for, make a telephone call to the company. There might be something that didn’t make it onto the website. To save on auto insurance, you need to do the leg-work; it will pay off.
Car insurance companies offer a wide variety of discounts, whether you’re a new driver or you have been behind the wheel for decades. Some will be automatically included when you get an insurance quote, while others will require you to ask your insurance company or agent to find out if you qualify.
Insurance is a realm where it is legal to charge different groups different premiums and offer varying discounts, so long as those groups are not protected classes and the insurance company can show a link between the rates they’re charging and the risk they face.
Source: U.S. News
There you have it folks. These are 10 ways to save on auto insurance. None of this is rocket science; however, if you follow these 10 simple tips there is no doubt in my mind you will save some money on your insurance policy.
What are your thoughts? What did we leave out? Which tip is your favorite and why? Leave a comment below to let me know what you think.