Car insurance is an absolute necessity, yet it doesn’t need to be prohibitively costly. With rates on the rise, many are searching for ways to lower their premiums without compromising coverage.
Some tips include shopping around, lowering coverage levels, taking a defensive driving course and increasing your deductible. But how can you go about accomplishing these goals?
1. Drive Safely
Your driving history is one of the primary determinants when it comes to car insurance premiums, so avoiding accidents and traffic citations will have a direct effect on lowering them.
Even if you’re involved in an accident, maintaining a good driving record could qualify you for programs such as Accident Forgiveness or Minor Violation Forgiveness that reduce your insurance rates after your first covered incident or violation – worth checking with your insurer as these could help lower rates immediately following.
Shopping around, taking defensive driving courses and bundling your auto and home insurance policies with one insurer are all ways you can save money. In addition, it is wise to review your policy annually to make sure you have sufficient coverage that meets both your needs and budget.
2. Get a Good Credit Score
Many drivers don’t realize that their financial standing has an effect on their car insurance premiums; in fact, a poor score could mean having to pay more each month for coverage they don’t actually need.
Personal finance experts advise making improvements easy: paying down any revolving balances, restricting credit application activity and maintaining older accounts open (this lengthens your history) can all boost your score.
Shopping around for rates regularly can also save hundreds annually; simply moving up one rung on the credit ladder could make a significant difference in cost savings, and bundling policies could even lower rates further.
3. Shop Around
Even though Obamacare no longer permits insurers to charge existing customers more than newcomers for premiums, it still makes sense to compare policies when renewing your policy. You could save money, get better coverage or discover discount programs you didn’t know about before.
As many factors can have an effect on your car insurance premiums, including driving and claims history, credit score and type of vehicle driven, it’s in your power to control some aspects of it – like switching vehicles frequently or adding drivers – so remember to comparison shop each year or whenever a major life event like moving occurs or adding drivers (including adding additional drivers with special insurance needs or buying homes). You might be amazed at just how much money can be saved!
4. Take a Defensive Driving Course
Many insurers provide discounts to drivers who successfully complete a defensive driving course, teaching you how to respond safely in emergency situations like other drivers, damaged roads, adverse weather and traffic conditions. GEICO will reduce car insurance premiums by 31% if this course has been successfully completed.
Courses are offered online and in person, and costs vary by state. In New York drivers can receive a 10% reduction on collision and liability premiums by taking an online course that takes 5 hours every three years; additional discounts may also apply based on age, gender and previous violations.
5. Install Anti-Theft Devices
Anti-theft devices are an effective way to secure your car while saving money on car insurance premiums. From simple alarm systems to advanced tracking technologies that help law enforcement locate stolen vehicles more quickly.
Insurance companies view vehicles equipped with anti-theft devices as lower risks, and may offer premium discounts accordingly. Of course, the type and quality of anti-theft device you select are also important factors.
Anti-theft devices can not only lower your premium but can also speed up the claims process and give you peace of mind should there be an accident. Be sure to notify your insurer if any anti-theft devices have been installed in your vehicle.
6. Take a Higher Deductible
A deductible is the amount you must pay before an insurance company will cover a claim, so increasing it from $500 to $1000 could lower comprehensive and collision premiums by 20-25 percent, according to financial sites. Just make sure that you can afford a higher deductible should an accident happen!
Consider bundling both your auto and homeowners policies with the same company, which many insurers now provide. Doing this can save money while giving you convenience with one bill and login for both policies. Many providers also provide discounts based on driving fewer miles, or other factors which reduce risk or necessitate less coverage.
7. Don’t Drive Often
Car insurance is an essential necessity, yet it doesn’t have to be costly. There are plenty of strategies for cutting the premium costs without compromising protection.
Consider several key elements that affect your rate, including your car’s make and model, coverage amount and deductible selection. Take steps such as taking a defensive driving course and fitting anti-theft devices on your vehicle to lower rates; bundle auto with homeowners or life policies to save more; consider how often and long distance you drive;
8. Take a Higher Deductible
Hunter reports that increasing both comprehensive and collision deductibles can bring your premium down by 11 percent on average, though you must choose an amount you can comfortably cover should an accident arise.
At least annually, it’s essential to shop around for car insurance and make sure it satisfies your current needs. Any significant life changes such as moving, starting a new job or graduating college should be reflected in your policy.
Your savings opportunities include bundling your car and home insurance with one company or taking advantage of discounts such as good driving, low mileage, anti-theft devices or more.
