Due to the rising cost of living and the litigious nature of our society, insurance rates have also increased exponentially across the board. However, there are ways that you can minimize your exposure which, in turn, can minimize your costs – especially when it comes to automobile insurance. Here are some things you can do to save on your car insurance:
1. Maintain a Clean Driving Record
The more accidents or moving violations a person has, the more he or she will tend to pay in terms of annual premiums. That’s the bottom line.
2. Consider a Defensive Driving Course
Ask your agent or insurance company about this discount before signing up for a course. You want to make sure that it is accredited. Some insurance carriers will reward a discount or even reduce points on your driver’s license if you complete an approved defensive driving course.
3. Work on Your Credit
Many times, folks are surprised to find that insurance companies may also consider credit ratings when determining insurance premiums. The theory is that individuals who keep their financial situations in tip-top shape will tend to be more careful when it comes to driving. Regardless of whether that’s true, be aware that your credit rating can be a factor in determining insurance premiums.
4. Choose Your Vehicle Carefully
Before making a purchase, get an idea from your agent on what it will cost to insure specific cars. Purchasing a top of the line vehicle may be ideal but, it will likely cost more to insure. (Keep in mind that older cars are often cheaper to insure.) Choose a vehicle that has anti-theft devices such as car alarms or Lojacks. This can help lower your premium. To learn more about choosing a cost-effective vehicle, see Wheels Of A Future Fortune.
5. Ride the Mass Transit When Possible
When obtaining car insurance, you will be presented with a questionnaire. One of the main questions is regarding the number of miles you drive the vehicle which, will have a bearing on your insurance premium. For example, if you use your vehicle to commute 2 hours to work daily, you will likely pay more in premiums than someone who drives 2 miles daily. Taking the bus can reduce your mileage which in turn, can reduce your premium.
Once you’ve obtained a policy:
1. Shop Around
If your policy has just been renewed and the annual premium has increased considerably, start obtaining quotes from competing companies. It is recommended that you re-shop your insurance every few years in case there is a lower rate. However, keep in mind that cheaper does not necessarily mean better. Read all the policy details.
2. Insure Multiple Cars/Drivers
If you obtain a quote from an auto insurance company to insure a single vehicle, you might end up getting a higher quote (per vehicle) than if you insure several drivers and/or vehicles with that company. Because they want your business, insurance companies will offer a discount for multiple drivers and/or vehicles on a policy. Speak to your agent or insurance company.
3. If Feasible, Increase Your Deductibles
When selecting car insurance, you can typically choose a deductible which is the amount of money you would have to pay out before insurance picks up the tab in the event of an accident, theft or other type of damage to the vehicle. The higher your deductible, the lower your annual premium will be and vice versa.
4. Remove Unnecessary Coverage
As we know, no one can predict when an accident will occur so, dropping certain types of coverage can be tricky. However, if an individual is driving an extremely old automobile that’s on its last legs, it may make sense (depending on the cost, the individual’s driving record and other factors) to drop collision coverage. The reason for this is that were the vehicle to be involved in an accident, the insurance company would likely total the car. If the value of the car is only $1,000 and the collision coverage costs $500 per year, it may not make sense to buy it.
Before making any such decisions, speak with your financial advisor and your agent/insurance company. Remember, every situation is unique and the decision is up to you. Hopefully these tips will have you driving in the right direction while saving you money!