Car insurance is a necessary expense for drivers, but that doesn't mean you have to break the bank to get coverage.
With a little research and some smart shopping, you can save on your car insurance premiums without sacrificing quality or protection.
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Ways to Save on Car Insurance
1. Shop Around for the Best Rates
Don't just settle for the first quote you receive - take the time to research and compare rates from multiple companies. You may be surprised at how much you can save by switching to a different provider.
Switching providers could be a highly advantageous way to get the best rate.
Use online comparison tools or work with an independent insurance agent to find the best rates for your needs.
2. Ask About Discounts
Combine discount opportunities for even more significant discounts.
Common car insurance discounts include:
Low mileage discount - save by driving under a certain number of miles per year, as specified by the insurer.
Safety feature discount - save by driving a vehicle with safety features, like anti-lock brakes and an anti-theft device.
Profession-based discount - save if you are part of a specific profession, like a teacher.
Good student discount - save if you maintain at least a (B) average in school.
Parking your car indoors
Completing a drivers safety course
Serving in the military
Being a senior citizen
3. Don’t Pay for Coverage You Don’t Need
Check your policy for duplicate or now unnecessary coverage to cut down costs.
For example, you might have another service that offers roadside assistance so that you won’t need it in your car insurance policy.
Another important decision could be choosing between full coverage and liability-only insurance.
Before switching to liability-only coverage, research your car’s value and average repair costs in your area to see if you could afford repairs on your own.
Review your car insurance policy after any major life changes, like getting married, moving to a new location, or changing your commute.
Also, many used car values depreciate or even appreciated over time, so it’s worth checking out your car’s current value when looking to update your coverage.
4. Increase your Deductibles
Your deductible is paid out of pocket before your insurance coverage kicks in.
Because your insurance company will offer multiple options for your deductible amounts when you purchase car insurance, it may be worth considering higher deductibles to lower your premium.
Conversely, the higher the deductible, the lower the premium.
Here's a simple example:
Let's say you currently have a car insurance policy with a deductible of $500. This means that if you have an accident and need to make a claim, you would have to pay the first $500 out of pocket before your insurance coverage kicks in to cover the remaining costs.
Now, let's consider increasing your deductible to $1,000. This means that if you have an accident, you would have to pay $1,000 out of pocket before your insurance coverage comes into effect.
By increasing your deductible, you are taking on more financial responsibility in the event of an accident or claim.
Why on earth would you want to do that?
Most insurance companies typically offer lower premium rates for higher deductibles.
So, if you increase your deductible from $500 to $1,000, your insurance premiums are likely to decrease. Meaning, you'll pay less money for insurance every month.
It's important to consider whether you can comfortably afford the higher deductible amount in the event of an accident or claim. You should have that amount set aside in case you need to pay it.
5. Improve your Credit
Believe it or not, insurance companies often use credit scores as a factor in determining rates. It makes sense that a driver who has been in a lot of accidents could cost the insurance company a lot of money.
To maintain a good credit score, pay your bills on time, keep your credit card balances low, and check your credit report regularly for errors.
By keeping your credit score in good standing, you can potentially save money on your car insurance premiums.
6. Bundle your Policies
Many insurance companies offer discounts if you have multiple policies with them, such as car insurance and homeowners insurance.
By bundling your policies, you can save money on both and simplify your insurance payments. Shop around and compare prices to find the best bundle deal for your needs.
7. Drive Safely and Avoid Accidents
Avoid accidents and maintain a safe driving record. Insurance companies often offer discounts to drivers who have gone a certain amount of time without an accident or traffic violation.
So, follow traffic laws, avoid distractions while driving, and always wear your seatbelt to stay safe on the road and save money on your car insurance.
8. Drive a Car that's Cheap to Insure
Before you buy your next car, compare car insurance rates for the cars you're considering.
Safe and moderately priced vehicles are cheaper to insure than glitzy and expensive cars.
Here are some factors to consider when choosing a car that tends to have lower insurance costs:
Vehicle make and model
Generally, less expensive and reliable vehicles with good safety records are cheaper to insure.
Cars equipped with safety features such as anti-lock brakes, airbags, traction control, and electronic stability control can help reduce the risk of accidents and injuries.
Size and power
Smaller and less powerful cars tend to have lower insurance costs because they are generally involved in fewer severe accidents.
Cars that are inexpensive to repair or have readily available parts typically have lower insurance premiums.
Models with high theft rates may have higher premiums, while vehicles with effective anti-theft devices or low theft rates may be cheaper to insure.
Age and condition
Older cars often have lower insurance costs due to their lower market value. Additionally, if the car has a good condition and a history of reliability, it may result in lower insurance rates.
9. Avoid Filing Small Claims
Avoiding small claims can help you save on car insurance in the long run.
Many insurance companies offer no-claim discounts as a reward for policyholders who don't file claims within a specific period. These discounts can accumulate over time and lead to significant savings on your premiums.
Filing multiple claims, even for small amounts, can result in increased premiums when your policy is up for renewal. Insurance companies consider claim history when determining rates, and a history of frequent claims can lead to higher premiums.
Loss of claim-free status
Insurance companies often offer additional benefits to policyholders with a claim-free history, such as accident forgiveness or first-accident waivers.
It's important to note that this strategy is generally applicable for minor incidents that you can afford to pay for out of pocket. In the case of significant damage, injuries, or accidents involving other parties, it may be necessary to file a claim to ensure proper coverage and protection.
The Bottom Line
Remember to review your insurance policy periodically and reassess your needs. Saving on car insurance requires a combination of research, maintaining a good driving record, and taking advantage of available discounts.