Buying auto insurance doesn’t have to be an overwhelming experience. In fact, by shopping around for new car insurance plans, you may find it’s possible to save a substantial amount of money. Many insurers are available, as are numerous types of auto insurance plans. It’s important to know what you need, but also to talk to several insurers to determine which can offer the best rate for your needs. These tips are the best place to start when having that conversation with your insurer or when you request a quote.
#1 Choose coverage that matches your needs
Know the worth of your vehicle. If it was damaged beyond repair, how much is it worth to replace? If it is an older vehicle, you may not need full coverage on it. On the other hand, if you have a loan or are leasing the vehicle, you’ll need to maintain comprehensive coverage (your title holder will require it). There’s no benefit, though, in purchasing too much coverage. Choose a policy that accurately reflects your specific needs.
#2 Maintain good credit
Auto insurance agencies use your credit score as a starting point when it comes to providing a quote for coverage. Those who have a poor history of paying debts on time are seen as a higher risk to insurers, leading to higher premium costs.
#3 Adjust your deductible
How much could you pay, out of pocket, if an accident occurred and your vehicle required repairs? If you can afford $500 for your deductible, that’s the way to go. But, if you can afford to spend $1,000, raising your deductible will significantly reduce your premium costs. Choose a level that’s comfortable for your needs.
#4 Bundle your coverage
One of the best ways to save money on auto insurance is to bundle coverage with other policies you need. If your insurer offers home insurance, recreational vehicle insurance, motorcycle insurance, or even life insurance, combining these policies can save an average of 20% or more overall.
#5 Ask for discounts
Nearly all auto insurers will offer some type of discount to customers. These discounts vary significantly from one to the next, but some might include:
- Good driver discounts (go without tickets or a claim year over year, and you’ll save money)
- Discounts for anti-lock brakes
- Discounts for anti-theft devices
- Save if you are a part of an organization
- Take a defensive driving course approved by the insurer
#6 Reduce the number of miles you drive
A key way to save money is to simply drive less. Insurance companies will charge more if you drive an extensive amount during the course of the year. If you can reduce your mileage, such as by walking or riding the bus to and from work, you’ll save money on your auto insurance. Be honest with your insurer; provide an accurate representation of your driving habits.
#7 Consider skipping comprehensive insurance
Vehicles that are low value and easily replaced may not need comprehensive auto insurance. While most states require vehicle owners to maintain liability insurance, comprehensive insurance isn’t a requirement. Keep this in mind, though:
- Liability insurance only protects other drivers when you cause an accident or damage to their property.
- Your vehicle is not protected from fires, theft, vandalism, and other risks.
- If your car is lost due to a significant accident, you won’t be compensated.
However, vehicles easily replaced may see a significantly lower premium without collision or comprehensive coverage. If you can handle this risk, it may be a good option.
#8 Purchase a group insurance plan
If you are a part of a professional organization or drive your vehicle for business purposes, you may be able to secure a policy with these groups. By purchasing numerous policies together (among members) you’ll save significantly on the cost of insurance. If you are a member of any type of professional organization, club, or other group, find out if your insurer offers discounts for members. This could help reduce your costs substantially.
#9 Be a good driver
Perhaps the most common reason for your car insurance rates to increase one year to the next is as simple as making mistakes. If you get a speeding ticket or other types of moving violations, your insurer will learn of this. Most importantly, if you continue to get tickets, adding points to your license, your costs will rise faster. In some situations, such as when you’ve committed a serious violation, such as driving under the influence or being at fault for a major accident, the insurer may decide not to renew your policy after the current contract expires. The problem with this, though, is that other insurers also learn of it when you obtain quotes.
- Drive the speed limit.
- Never be at risk of driving under the influence.
- Be sure to keep a safe distance from other drivers.
- Don’t use your phone in the vehicle.
- Focus on the road – distracted drivers are a leading cause of accidents today.
#10 Shop around
It’s simple. Every insurer is different and the only way to know which one can save you the most money is simply to request a quote. Keep in mind that most insurance companies will offer a substantial discount to you the first year you sign up for coverage with them. And, there is no benefit or reason to remain with the same insurer year after year if their rates no longer are competitive. If your insurance policy is about to expire (and don’t let it expire as that can raise your rates, too), it is time to get a few quotes for coverage.
Take a moment to consider how much you are paying for auto insurance. If you want to shave off 10 or even 30 percent of that cost, get a quote for auto insurance. Keep in mind that you’ll need to ask for all discounts you may qualify for and even negotiate a lower rate. The biggest savings come from being able to compare policies that are just right for your unique needs.
By Sandy B