As a car owner, you know how auto insurance premiums can take a considerable percentage of your annual budget, especially if you own several whips. A myriad of factors affects your auto insurance pricing, including your location, driving record, credit history, the type of vehicle you drive, mileage covered per year, and more. With auto insurance rates often going up rather than down, it`s ideal to search for ways to lower your premiums. A good starting point will be to compare car insurance quotes. You can get quotes online or from a car insurance representative free of charge. Here are other ways in which you can save money on car insurance:
Reduce Your Mileage
You probably drive less these days because you’ve moved closer to work or school. If your mileage has drastically reduced in the past year, inform your insurer about your updated mileage.
The higher your annual mileage, the more you will pay for insurance, and vice versa. Of course, mileage discounts will differ based on the insurance provider. This is because other factors like the type of car you drive and where you live also contribute to your premium rates. If your rates don’t go down at all, despite driving less of late, consider searching for a quote from a different insurer.
Scrutinize Your Policy
Do you understand the finer details of your policy? Go through the fine print instead of the brochure. Make sure to ask your insurance agent questions to understand what they’re offering. You can always customize your policy to fit your coverage needs and budget.
For example, you may opt to do away with collision and comprehensive coverage. Removing these coverage options won’t affect your liability coverage. So you won’t have to worry about footing expenses from car damage or injuries suffered by third parties when you are at fault.
Lower Your Car Insurance Deductibles
Your deductible, or the sum you pay out of pocket when involved in a mishap, affects your premium rates. Raising your deductibles brings down your auto insurance costs and vice versa.
However, the best deductible involves a perfect balance of your psychological comfort and financial flexibility. This means that if you`re on a tight budget, you are better off with a lower deductible which translates to a somewhat manageable higher monthly premium. This will help you avoid the possibility of paying a high repair cost out-of-pocket.
And if you choose to settle for a high deductible plan, you better make sure that your emergency fund can accommodate it. For example, if you have a $1,500 deductible, you would have to pay $1,500 in case of a claim. Make sure that you can pay for that amount out of your pocket.
Shop Regularly for Insurance Coverage
Few drivers spare time to regularly shop around for better insurance policies. Experts recommend that you shop for auto insurance after every six to 12 months since most policies last for this period. It’s quite understandable if you hate shopping for new quotes. It’s an annoying and time-consuming experience. But have you ever thought of the opportunities that you’re missing out on saving on your insurance?
Different insurers can charge you differently for coverage on the same car in the same state. It’s because every insurer measures risk in their own way. This means that you can be categorized as high-risk with one insurer and low-risk with another.
For example, several traffic violations may increase your premium rates with one insurance provider compared to another. And one company might look at your credit history while another one might not. So you better do your research well if you want to find a cheap bargain.
Bundle Your Insurance Policies
Another trick to save on your auto insurance is by bundling it with another policy. You’ve probably come across this type of discount on TV commercials, and you must have thought it was too good to be true.
Product bundling means that you purchase two or more insurance policies from one insurer, for example, auto and homeowners insurance. Besides increased savings, you get to enjoy many other benefits by bundling up insurance policies. This includes simplified policy management and insurance security.
In general, bundling discounts range from 5 percent to 25 percent. You will hardly find a better auto insurance discount than this. Insurers offer extra discounts on bundled insurance coverage as a technique for customer retention. Customers who take more than one policy with one insurance provider are less likely to shift to other providers.
Bottom Line
Cars accidents are on the rise each year following an increase in vehicles on the roads. This is why your auto insurance premiums will continue to go up each year as well. The easiest way to save on your insurance is by maintaining discipline on the road. You can also shop around for auto insurance companies that offer lower rates and a wide range of discounts.
