Getting the right policy for your car can be a challenge, especially if you’re new to buying insurance on your own. These auto insurance tips can potentially help you save money on coverage.
Boost Your Credit Score
In most states, insurance companies use your credit rating to help determine your auto coverage premium. If you have poor credit, statistics indicate that you may have a higher risk of auto accidents, which results in a higher price for insurance.
Combine More Than One Policy
You can save on coverage if you insure more than one driver and/or vehicle with the same provider. Most companies provide a discount for the additional business. It’s not just for auto insurance policies; according to Bankrate, you can also save by bundling home or renter’s coverage with your car insurance. For example, Allstate provides a 25 percent discount on homeowner’s coverage and a 10 percent auto discount when you combine both policies.
Check with your insurance company to see whether you qualify for this type of discount. Usually, only family members can share an insurance policy, though you might be able to get joint auto insurance with a roommate if you own a car together.
Save Money With Safe Driving
Being a mindful driver who avoids distractions and dangers can not only prevent serious accidents but also help keep your auto insurance rates low. For example, Travelers Insurance provides a safe driver discount of up to 23 percent according to Nerd Wallet. On the other hand, moving violations that carry points on your driving record, such as speeding, will also raise your auto insurance premiums.
Opt for Higher Deductibles
You can select a deductible for your auto insurance coverage ranging from approximately $250 to $1000 according to Investopedia. The deductible is the amount of money you pay out of pocket if you have an auto insurance claim. If you can afford higher upfront costs if you have an accident, consider increasing your deductible to save money on your premium.
Check with your insurance agent to find out how changing your deductible will impact your insurance premium. This step might not make sense if you can only realize minimal savings.
Install Anti-Theft Systems
You can lower your annual auto insurance rates by putting an anti-theft device in your vehicle or purchasing a car with this kind of equipment. For example, GEICO offers an anti-theft discount for its customers of up to 25 percent.
Remove Unnecessary Coverage
Read your policy declarations page and identify any aspects of your coverage you don’t need. Removing these policies, such as car rental coverage and roadside assistance, will save you money on car insurance.
If you have comprehensive and collision coverage on your vehicle, Investopedia recommends checking occasionally to see if it still makes sense to have these policies based on the actual cash value of your car. If the cost of comprehensive and collision plus your deductible exceeds the vehicle’s value, you can drop your coverage.
Ask for More Discounts
You might be able to save money on auto coverage with unadvertised discounts. For example, ask about saving money for affiliation with certain groups, opting for online policy information, or paying your entire premium cost in advance. Compare the discount prices with those from other insurers to get the best available rate. Basically, if you’re thinking of switching to a different auto insurance company because of cost, talk to your agent to see if he or she has any ideas about how you can save.
Consider a Telematics Plan
Sometimes called pay-as-you-go coverage, telematics insurance uses a device that plugs into your vehicle or a smartphone app to track your miles and driving behavior. According to Investopedia, you can likely save money with this type of coverage if you tend to drive fewer than 10,000 miles a year. You can also earn discounts for safe habits behind the wheel. Examples of telematics programs from major insurance companies include Drive Safe and Save from State Farm, Snapshot from Progressive, and Drivewise from Allstate.
Maintain Good Grades
Drivers ages 25 and younger can usually qualify for an auto insurance discount based on grades. Depending on the insurance company, they may need to place in the top 20 percent of their class or have at least a 3.0 GPA (B average). Investopedia notes that these discounts can range from 1 to 39 percent, so it pays to shop around if you have a high school or college student on your policy who earns good grades.
Go Back to School
Some insurance companies provide discounts to drivers who take a defensive driving class. Usually, only approved courses qualify for this type of incentive. Some states even require insurers to offer this type of discount. Find out how much you can save before you commit to a class. Otherwise, you may spend more than your discount on the course itself.
Run a Background Check
Price isn’t everything when it comes to choosing the right auto insurance company. You should also check the credit rating of the company to make sure it has the money to pay your claim if necessary. Resources such as Standard and Poor’s provide free online reports about insurance company financial strength ratings, so search this type of database after you get a quote.
Choose Your Car Carefully
If you plan to buy a car, think about these factors that will influence your auto insurance premium:
- Larger cars cost more to insure than small cars
- Luxury cars cost more to insure than value-priced cars
- Many insurance companies offer discounts for ecofriendly hybrid and electric vehicles.
For best results, get a quote on insurance before you fall in love with a particular make and model. In fact, shopping around with several companies to get the best rate is one of the most important auto insurance tips. Experts recommend getting new car insurance quotes every year or two, or more often if your rate goes up unexpectedly.
Check this out if you need additional information, resources, or guidance on car insurance.
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