Ways to Save Money on Car Insurance

Millions of Americans overpay for their car insurance, but there are several ways that you can save money and still get adequate and quality protection. Legally speaking, of course, there is no way around automobile insurance. As a result, millions of Americans overspend on auto insurance every year, mostly out of indifference. No doubt, having quality auto protection is a smart thing to do, but doing so adds to the cost of driving.

These days, depending on a number of factors, premiums can vary by hundreds of dollars. Before you renew your insurance, see if your insurance is in harmony with your needs and review some of these practical steps to save money on your car insurance.

Compare Insurance Companies

As we said, there is not getting around car insurance, but you can save money by comparing prices and looking around for better prices. We usually don’t look around too much for car insurance because it is just one of those things you pay for without thinking much, like your phone or electricity bills. There are many aggregator websites to help you out and a quick search (it takes all of 15 minutes) will throw up some great options for you to consider. You can scan the results while you are vacuuming the room or taking your dog for a walk!

Get at least 3-4 quotes from different companies and a quick search will tell you that there are many types of insurance companies as well. There are those who sell through independent agents, there are those who have their own agents, there are yet others who sell directly through apps or phones. Another great way of gleaning more information about this is to ask friends, co-workers or relatives because they will have recommendations based on actual experiences.

Bundle the Coverage

Almost every car insurance company has more than one policy on offer, and one of the easiest ways to get a discount is to bundle your car insurance with your renter’s or homeowner’s insurance. While asking questions, ask the insurance agent how much you would save if you were to buy all policies from the same company. And most insurance companies will have this discount because they wouldn’t want you to shop around. But you shouldn’t fall for that — still ask around and compare prices as we told you in the first step.

If you are careful about it, you can shave off almost 10% or more on all of your coverage. Keep in mind that the insurance industry is ever changing and there are always new entrants in the market for you to choose from.

Maintain and Achieve Good Credit

Many drives, new or old, don’t realize (or just plain forget) that credit is a factor, and that insurance companies while deciding the cost of your premium, look for a lot of factors. And one of the factors that play a major role in this is your credit score that decides how much you would pay for your premium. So one of the best ways to save money on your insurance premium is to maintain and achieve a good credit score.

There are many ways to do this, and you will have to realize that these won’t work overnight, but will gradually get you there. One of the quickest ways to do it is to pay your bills on time by not missing any payments on your loan. These simple changes will not only result in improving the interest rate on loans, but there is also a chance that you will see a decrease in your car insurance premiums.

Take up a Driving Course

Don’t be so surprised, this could save a lot of pretty dollars on your insurance rate. Before you sign up for your insurance, ask the insurance provider whether taking up a course on driving will get you a discount on the overall rate. Ordinarily, young drivers under 21 can undergo a driver training course, while those above 50 can go for a course in defensive driving.

As a bonus, these courses will help you avoid any accidents in the future, saving you money, even if not directly. One of the things that these courses cover is to avoid or react in a high-risk situation that could end up in a rather big collision and cause injury to you or major damage to your car. If just taking a course is going to be this beneficial to you, why wouldn’t you?

Think Before You Buy the Car

For the price you will pay for the car insurance, the car you have chosen to buy is also a major factor. Car insurance companies base insurance premiums on factors such as the likelihood of theft, the car’s safety record and of course, the car’s price. So insurance companies base the premium on the car’s safety features or how expensive would it be if it were to be repaired after an accident.

Keeping that in mind, it is a good idea to also research on the same lines, and compare it with other models over what would it cost if you were to insure them. Checking the safety rankings of the cars you have in mind would help you decide faster. A lot of drivers don’t consider the cost of insurance premiums, so do not make the same mistake (that is if you haven’t bought the car already). That sports car would look great parked on your porch, but ask yourself if it is worth paying thousands of dollars just for the looks?

Increase the Deductible

Raising your deductible is one of the simplest ways to lower your monthly premiums. To get the most out of your insurance policy, it is very important that you understand the role deductibles play while getting insurance for your car. But be mindful that in case of an accident, you have set aside enough money to pay the higher deductible. So don’t raise them so high that they might cause you financial stress.

Have a Low-Risk Occupation? Mention It!

Car companies often go beyond your age, gender, driving habits or history when they determine the rates of your premium. It may sound a bit weird, but what you do for a living may also save you a bit on insurance premiums. This is because people with certain professions are seen by insurance companies as more (or less) careful drivers. This is because statistics may have to do something with it, as certain careers are associated with a higher accident risk, while others are associated with a low risk.

Occupations that are considered low risk are pilots, accountants, teachers, artists, scientists, nurses and first responders. Occupations considered high risk are real-estate brokers, architects, doctors, lawyers, executives, business owners and salespersons. So, if you have not been asked what your profession is by your insurance agent, be sure to let them know, because it could save you a pretty penny!

Usage-Based Auto Insurance

You don’t use your car much. You only use it to drive it to the local supermarket once a week or month and the car is sitting in the garage for the rest of the time. But do car insurance companies care about that? No. You will still get the bill you signed up for. But times are changing and pay-per-mile insurance is not a fantasy, but a reality.

Be aware though that your data (such as your driving habits, the number of miles you drive, the number of times you brake hard or accelerate and so on) will be gathered via a telematics device and sent to the insurance company. So, if you are not very comfortable with this arrangement, this method is maybe not for you.

Ask for Other Discounts

You will be surprised by the number of discounts car insurance companies offer, and they vary from state to state or company to company. You should ask your agent to review all these available discounts before you sign on the dotted line. Here are some of these discounts we bet you never heard of:

  • Good Student Discount: Young drivers usually pay higher premiums, but at the same time, young drivers with good grades are eligible for this discount because according to statistics, students with good grades are less likely to cause accidents. If you are below 25 years of age and are full-time enrolled at a school or a college and maintain a B average, you might be eligible for this discount.
  • Being Married Discount: This one should be self-explanatory. According to a study, married drivers have fewer motor vehicle accidents, compared with single people. So clearly, marriage has a very positive effect on your auto insurance premium!
  • Anti-Theft: If your car is equipped with anti-theft devices, you may avail of this discount. You may be asked to provide proof of the installed device.

Additionally, some insurance service providers will give you a discount if you have bought two or more policies from them. These could include house, motorcycle, boat or RV insurance, and is called bundling.

Conclusion

Do not hesitate to ask your insurance provider for a discount, but at the same time, be aware of what is important for you. Also, it never hurts to ask the insurance agents to make you a better offer than the first one and use any other quotes you may have gotten from other sources. This usually works with the company you are already insured with, and asking them if they could do better than the rate you already have usually helps.

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