And the insurance rates you pay are hugely dependent on the insurance company or agent, your age, type of car, driving record, and even the area you live in!
You should never do without car insurance, despite the costs. Almost all states require you to protect yourself with a minimum amount of liability coverage. Naturally, the bare minimum is not enough for the average car owner. And as you add additional coverage for your car, you realize that you will be paying quite a significant amount of money each year.
So, understanding auto insurance can actually help you choose an appropriate insurance policy that won't drain your wallet! Here we've rounded up 10 of the best tips to lower your car insurance by up to 40%!
Always compare insurance policies. There are states that regulate auto insurance rates, but insurance premiums can vary by several hundred dollars for the same coverage. Definitely worth shopping around. The first thing you can do is check with your state insurance department. They often provide information on the coverage you need, as well as sample pricing from larger companies. You can also ask your friends or check the yellow pages. Consulting consumer guides and asking insurance agents can also pay off. You can easily find out the price range of your insurance policy, as well as discover the lowest prices in town.
However, you shouldn't shop based on price. The insurance company must provide good service at the best price. Excellent personalized service is also available, and they offer additional amenities, although they cost a bit more. Ask the company how you can reduce your costs and also check their financial ratings. The rule of thumb is always to get three quotes from three different companies and choose the one that offers the best value for money.
It may also be a good idea to increase your deductibles. When you file a claim, the deductible is the amount you pay before the insurance company pays the rest of the damage. A higher collision deductible and comprehensive coverage can result in a much lower premium. For example, increasing your deductible from $200 to $400 can lower your premiums by up to 25%. However, you need to ensure that you have the financial resources to handle the highest deductible when the time comes.
Remove certain types of coverage from your policy. Almost all states require liability coverage for your car, but the rest of the coverage is probably dispensable. However, you don't want to be underinsured in the event of an accident, so it's not advisable to drop all of your extra coverage. Optional coverage includes medical payments, uninsured motorists, collisions and comprehensive coverage.
Collision drop and comprehensive coverage for older cars. If you're driving an older car that's worth less than $2,000, it's probably more cost-effective to ditch collision and comprehensive coverage because you'll likely pay more for coverage than a claim. You can find out the value of your car by asking car dealerships and banks.
Make sure your credit report is good. Car insurance companies often look at your credit history because there is a correlation between the risk to the business and your credit history.If you pay your bills on time and maintain a good credit history, you can qualify for lower insurance rates.
Drive less. Insurance companies often offer low mileage discounts to motorists who travel less than a predetermined number of miles each year. You can use public transportation more often, carpool with friends, and take the train or plane instead of driving to another state. And you'll save more than your coverage because you'll have to spend less on gas (the prices of which are incredibly high).
Maintain a clean driving record. The company will give you a price reduction and you can save on your insurance policy after a specified period of a clean driving record. This means that you have no accidents, serious driving violations, etc., during this period. The easiest and safest way to claim this discount is to drive carefully and defensively at all times.
Choose a low profile car. Insurance rates vary for different vehicle models. Generally, sports cars and high performance cars tend to cost more to insure, mainly because they pose a higher risk of theft and the drivers are often the most reckless drivers. Newer cars will cost more to repair or replace than older ones, so naturally they can insure more. Low-risk vehicles include station wagons and sedans.
Ask about security and safety discounts. Insurance companies sometimes offer discounts on your insurance if your car is equipped with the following: anti-lock brakes, air bags, automatic seat belts, car alarms, tracking systems. These reduce the risk of injury to you, as well as the risk of vandalism or theft of your car.
Finally, ask about other discounts. You may qualify for a discount if you purchase more than one type of insurance from the same company or if you insure multiple cars under the same policy or company. You can also get discounts for taking a defensive driving course, staying with the same company for a few years, being a driver over 50, good student discounts, and being an AAA member. If you already have adequate health insurance, you can also eliminate duplicate medical coverage payments, reducing your injury protection costs by a substantial amount.
