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Tips To Reduce Car Insurance Costs

December 16, 2021 6 Min read

As a car owner, you’re prone to the risks of accidents or theft at any time. For this reason, you’d want to get auto insurance coverage to protect yourself from drastically losing money if you run into such unfortunate eventualities.

Indeed, car insurance is a means of financial security in case of a claim. But if you lack the proper method to approach your insurance policy, you could end up deducting vast sums from your bank account monthly to pay the car insurance premiums. However, the good news is that you can make it more manageable by reducing the costs. Here are 11 tips to do so:

1. Before You Buy, Check The Car’s Specifications

The insurance rates vary for different vehicles. To calculate the amount of premium you’ll pay, an insurance company considers the following:

  • The model of your car
  • The make 
  • The year of manufacture
  • The safety features such as airbags, shatter-resistant glasses, alarms, and so forth 

These factors, combined with extensive auto research, lead the insurers to conclude the chances your car stands at when involved in an accident and the level of damage that’s likely to occur. If the probability of accidents and associated damage is low, your premiums will also reduce. 

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So, if you’ve had your eye on a car for a while, pay attention to the above-mentioned features. Then, do some digging from reputable sites like BestCarInsurance.org  to get more insight on car insurance. Once you’re confident that the insurance rates for your automobile will be pocket-friendly, you can make that purchase.  

2. Compare Insurance Rates From Different Companies 

There are plenty of insurance companies all offering different and attractive claims. But to get a favorable deal, comb through the packages that various insurance companies in your locality offer. You can collect notes of your findings for future reference. Compare insurance rates from different companies and select a firm that offers the best deals that match your budget. 

You may also reach your state’s insurance department for information on the price ranges for leading car insurers. Additionally, you can ask your friends or family for recommendations on companies that can offer you favorable premiums. 

3. Maintain A Clean Driving Record 

The most practical way to keep demerit points, suspensions, or convictions off your driving sheet is to be a safe driver. And safe driving is simply following the traffic rules. Your insurer will analyze your driving record for any violations, including moving violations. The more red flags they spot, the higher your insurance rates will be.

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Therefore, if you want to cut your auto insurance costs, make a point of maintaining a clean driving record under your vehicle’s license. Being a careful motorist means your probability of encountering an accident is low. Consequently, you get to enjoy lower insurance rates. Maintaining good driving habits is always a net benefit for all.

4. Go For Higher Deductibles  

Insurance deductibles comprise the amount of money you cash out from your pocket in the event of a claim such as an accident. For instance, if your deductible is worth USD$500 and you get involved in an accident with repairs that cost USD$3,000, you’ll only pay USD$500. The rest will be covered by your insurance. However, as comforting as this may seem, you’ll have to pay significantly higher premiums every month.

So, to cut your monthly car insurance rates, ask for higher deductibles. You could move from USD$500 to USD$1,000. Depending on your company’s operational rates, your monthly premiums may be slashed by up to 25%.

On this account, craft a strategic means to increase your deductibles over time. You’ll end up saving thousands that you’d have otherwise spent on monthly insurance premiums had you stuck with the less deductible sums. However, before you increase your deductible rates, ensure that you set the amount aside so you can conveniently pay up in case a claim arises. 

5. Boost Your Credit Scores

You might be wondering how your credit ratings affect your vehicle insurance premiums. Well, according to some insurers, a good credit record indicates that you’re a responsible person. And the more dependable you are in your personal life, the less likely you’ll file auto insurance claims.

So, to maintain good credit scores, you may:

  • Spend below your credit limit
  • Pay your bills on time 
  • Continue using your old credit card accounts to build a more robust credit history
  • Only apply for new credit when necessary
  • Promptly correct any errors on your credit reports

With good credit scores, your insurer will have no reason to doubt your creditworthiness. In turn, your insurance rates will reduce. If possible, you may also pay your car insurance upfront. By doing this, you could get cutbacks when applying for an insurance package upgrade, or you could be the recipient of attractive discounts on offer. 

6. Select An All-In-One Insurance Company 

Most insurance companies offer more than one type of insurance. For instance, a company may be dealing with auto insurance policies, life insurance, homeowners insurance, and more. 

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You may use this to your advantage. Instead of having insurance coverages for different entities in various companies, you may select a credible company to meet all your insurance needs. In return, you’ll get to enjoy discounts on your monthly rates. Additionally, you’ll build a good relationship with your provider and this may encourage them to accept your requests regarding lowering your auto insurance costs. 

7. Leverage Multi-Car Discounts

If you own more than one vehicle with different drivers, it’d be wise to insure them all under one bulk insurance policy. These rates are lower than those for insuring single entities since you’ll also get related discounts. For more insight on these offers, you can make further inquiries with your insurance agent. 

8. Consult A Reputable Agent  

Car insurance policies can have underlying charges that affect the overall cost of policy coverage. You might not notice them when paying your annual subscription, but these minor costs may be unnecessary expenses, and they may significantly increase your monthly insurance charges. For this reason, you should get insurance advice from a reputable agent who can help determine any blind spots on your cover. In turn, you’ll get the best insurance deals.   

Furthermore, an insurance agent will keep you in the know of any available offers. For instance, an insurance company could be rolling out discounts to old clients with spotless accident claims on their policies. An agent can reach out to the company, get the information, and update you on the conditions of such offers.  

9. Make Use Of Low Mileage Insurance 

Low mileage insurance is also known as pay-as-you-go insurance. In this case, the insurance company fits a tracking device into your car to measure the number of miles you drive and know your annual miles. 

The operational theory behind this policy is that the more distance you cover, the more likely you’re to run into an accident. This makes it riskier for them, so your insurance premiums skyrocket with every extra mile. 

On this account, if you don’t drive long distances, you may take advantage of the pay-as-you-go policy. The shorter your mileage coverage is, the less likely you are to make an accident claim. This, in turn, reduces the liability of the insurance company paying for your claim, so you get lower rates of monthly premiums.

10. Revise Your Current Coverage 

You should review your insurance coverages to ensure that your automobile’s value is worth the monthly rates you pay. If you have an old car with a substantially depreciated value, you may want to write off some coverage types. For instance, if your car’s worth is USD$25,000 and your yearly premium rate is USD$2,000 renewing collision or comprehensive coverage annually would be uneconomical.

Additionally, you should revise your policy to stay updated on the insurance policy changes. For instance, you could be paying premiums for cars that are no longer covered by your insurer. If you are, you’ll end up throwing plenty of money down the drain. This is a scenario you could easily avoid if you’re updated about your policy. 

11. Look Up Extra Discounts

Discounts are a fun way to enjoy cuts on your auto insurance. The more discounts you have, the less premium you’ll pay. For this reason, you should always be on your toes to spot any items in your insurance coverage that may enable you to cut some amount off your premiums.

Aside from the already mentioned deductions, ask your insurance company if they offer slashed rates for the following:

  • College students away from home, student discounts
  • Anti-theft devices installed in your car
  • Drivers taking defensive driving courses
  • Loyal customers
  • Student drivers with good grades

And apart from these, ask for any other deals that may grant you discounts so you can further cut your insurance costs.

Conclusion

Having the correct information about car insurance costs will help you acquire the best coverage for your policy. Start by evaluating your insurance needs and the available service providers before signing any car insurance policy contract. Whether you have collision coverage or some other level of auto coverage, know all the information before purchasing a plan. Additionally, know your car’s specifications, maintain a clean driving record, choose higher deductibles, build your credit scores, opt for one insurance company to cover all your insurance needs, revise your current coverage, consult a trustworthy agent, know the number of miles you’re driving on a regular basis and understand the discount offers the insurance policy can grant you. With these tips, you can definitely enjoy lower insurance premium amounts.

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