In most states in the U.S., drivers must have a car insurance policy in order to legally drive a vehicle. In fact, you cannot even register a vehicle unless you can show proof of insurance. If you allow your policy to lapse, you risk having your registration suspended. If you are pulled over and you don’t have proof of insurance, you can get a ticket and a fine. In some cases, your vehicle will be towed. If this happens, you won’t be able to retrieve your vehicle without proof of an active insurance policy.
With the high cost of gas today and the cost to maintain your vehicle, the cost to own a vehicle can be high. This is why it is important to save money wherever you can. Fortunately, you can save money on car insurance. There are a few tips that you can follow so that you can be sure that you find the right car insurance policy with the lowest premiums.
#1 Check the Rates Of Different Policies Each Year
Whether you pay your insurance premium monthly, every six months, or yearly, it is a good idea to check the rates from different companies every year. It is not uncommon for your situation to change as the year goes on. Also, as different companies compete with one another for your business, their rates can change. There are a few different ways that you can check the rates from various companies. First, you can compile a list of the major auto insurance companies and either contact them directly or get a quote online. If you feel that this would be too time-consuming, you can use a comparison service called My Choice Car Insurance. When you use this service, you would simply enter your information into the system. This would include your personal information, information about your vehicle, and any speeding tickets or accidents within the last three years. The system will use this information to check the major insurance providers to give you a quote from each. This will save you the time of contacting each insurance provider on your own. Most comparison tools will compile a quote from several of the top insurance companies in your area. In some cases, the quotes that you get won’t be the exact amount that you would be required to pay. When you go ahead and purchase the policy, you may find that the amount of the insurance will be slightly higher or lower than the quote you are given. This is because you will be required to supply a bit of additional information when purchasing the policy. Oftentimes, however, you will be given a quote that is exact or just a bit off.
#2 Pick a Top Rated Insurance Company
Just because a company has the lowest premiums, it doesn’t mean that they are the best overall. There are other things that you should consider such as how fast they handle claims, how much they will raise your premium if you are in an accident, and how they deal with non-claim issues. There are online review websites where you can read reviews from actual customers. This will give you an idea of how they handle these issues.
#3 Maintain Good Credit
Most people know that in order to get a mortgage, a credit card, or a loan for any reason, you need to have good credit. What you may not know is that your credit score can also affect your insurance premiums. There are several car insurance companies that require you to give your social security number so that they can run your credit. This can affect what the company will charge you for your insurance. Before renewing your insurance policy each year, it is a good idea to check your credit to be sure that there are no errors on your credit report. If you have been able to significantly raise your credit over the course of the year, you should contact your insurance company and let them know. if you are working with a company that takes your credit score into consideration, your improved credit score can lower your premium for the upcoming year.
#4 Choose The Right Deductible
When buying an auto insurance policy, you will be able to set your own deductible. This is the amount of money that you would need to pay in order for the insurance company to pay out of pocket for your vehicle repairs if you are involved in an accident. The higher the deductible you choose, the lower your premiums will be. If you have a good driving record and you have never been in an accident that you caused, you should consider choosing a higher deductible. This can save you up to 40 percent on your insurance premiums. If you aren’t the best driver and you have caused accidents in the past, you may want to choose a lower deductible. This will cost you less out of pocket if you do cause an accident.
#5 Review Your Coverage
When you are getting quotes from various companies, they will give you the cost of the coverage that they think is best. The coverage that they think is best, may not be what is best for you. If you are a good driver and you are not making payments on your vehicle or leasing your vehicle, you can go with the minimum coverage according to state law. You should understand that minimal coverage means minimal protection, therefore, you should lower the amount of coverage at your own risk.
#6 Report Reduced Mileage
One of the things that auto insurance companies look at when giving you a quote is how much driving you do. One of the questions asked is how many miles you drive to work or school. Insurance companies assume that the more driving you do, the higher the chance that you will be involved in an accident. If you recently changed jobs and you are now working closer to home or if you are currently unemployed and you are not driving back and forth to work, it is a good idea to let the insurance company know. Now that you are not driving as much, it can lower the cost of your premium. The same is true if you have graduated from school and are no longer commuting.
#7 Report Your Personal Status
If you were recently married and you weren’t when you bought your auto insurance policy, you should contact your insurance provider to let them know. This is because your marital status can affect the cost of your insurance. Most auto insurance companies believe that married couples are less likely to be involved in an auto accident, therefore, they offer discounts for married couples. Getting married may not save you a fortune on insurance, however, getting married can lower your premiums a bit. At the end of the day, saving a little bit of money is better than saving no money at all.
Bonus Tip #1: Consider Your Insurance Costs While Car Shopping
If you are planning to buy a new car, you should keep the cost of insurance in mind before you buy. Vehicle damage and the cost of repairs plays a big part in what you would pay for insurance. The Insurance Institute For Highway Safety has information regarding losses by vehicle model. If the vehicle that you are thinking about buying is high up on that list, you should think about buying something different.
Also, you should think about the cost of the vehicle. While it may have always been your dream to drive an expensive, luxury vehicle, you should think about the cost of insurance. The more expensive your vehicle, the higher your premiums will be. If you buy the expensive car, you are going to need to worry about not only your insurance premiums but also the cost of the excise tax each year which can be astronomical with an expensive car. If you don’t take these costs into consideration, you could find that you are unable to afford the car that you have chosen. If you need to give the car back or if it is repossessed, it can have a negative effect on your credit score which could increase your insurance premiums when you purchase a more affordable vehicle.
Finally, you should take a look at the safety features. If the vehicle that you choose has anti-lock brakes, a backup camera, sensors to let you know if you are coming close to another object, or that stops automatically if you don’t stop in time, you would be eligible for discounts.
Before you go car shopping, you should do extensive research so that you can save money on your premiums.
Bonus Tip #2: Work With Companies Who Offer Discounts
Most auto insurance companies today offer discounts for drivers who have multiple vehicles on their policy. The more vehicles you insure, the more money you will save. For example, if you are married, you and your spouse should be on the policy and both vehicles should be included in the policy.
There are many companies who also ensure boats, RV’s, all-terrain vehicles, and motorcycles. If you have any of these types of vehicles, you should work with a company who offers insurance on these types of vehicles. You can get a discount when you ensure these types of vehicles along with your car.
If you own your own home and you have a homeowner’s insurance policy or if you rent and you need a renter’s insurance policy, you should work with a company who sells these policies as well. When you bundle your home and auto insurance, you would be eligible for significant discounts. Overall, the more items you insure with a particular company, the more money you can expect to save on your premiums.
If you don’t own another vehicle, a home, or if you don’t have renter’s insurance, there are other discounts that you could qualify for. Safe driver discounts are available for someone who drivers who have never had an accident or a ticket. If you are a safe driver, you should look into companies who offer these discounts. Also, if you have completed a driver’s training class, many insurance companies will offer discounts if you have proof that you completed the course.
Bonus Tip #3: Think Before Filing a Claim
If you are involved in a minor fender bender and there is very little damage to your vehicle, you should think twice before filing an insurance claim. First, consider whether the cost of the repairs would be less than your deductible. If they aren’t it isn’t worth filing a claim. If the cost will be more than the cost of your deductible, you should still consider whether or not filing a claim would be worth it. Unless you have a policy that has “accident forgiveness”, which is where your rates won’t go up if you cause an accident, it might not be worth filing a claim. If you file a claim, your premiums will increase. If you don’t want to see an increase in your premiums and the damage is minor, you are better off paying out of pocket. If the added cost to your insurance premium outweighs the cost of the repairs, you should pay just for the repairs out of pocket. Since filing the claim will affect your premium for up to three years, minor repairs are not worth filing a claim for.
It is important to understand that all insurance companies are different. Each company uses a different formula to come up with a premium for drivers. Just because a friend or a family member has a low premium from one company, it doesn’t mean that you will. If you want to be sure that you are going to get the lowest insurance premiums, you should follow the tips listed above. If you follow these tips and you choose the best insurance company for your situation, you could save hundreds of dollars each year on car insurance.
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