There are few more frustrating things for a good driver than the car insurance bill. You drive carefully, avoid accidents and don’t submit insurance claims and still your car insurance costs continue to rise. If you’ve had an accident recently, things might be incrementally worse. And, irritatingly, much of it seems out of your control. But that doesn’t mean you need to sell your car and start riding a unicycle to work. What can you do to save on you car insurance? Here are the best tips we at Driving Today know:
1. Understand what you are buying and why
Many people buy auto insurance because their state requires that they have insurance in order to drive. They don’t even consider that car insurance is designed to protect them from difficult and perhaps even catastrophic financial loss. Your insurance policy covers not only your vehicle but, more importantly, some important aspects of your financial well-being. Sure, when your car gets into a crash you want it fixed or replaced, but the bigger issues are bodily injury liability, property damage liability, and medical payment coverage. Failure to have those coverages or enough of those coverages could leave you and your family bankrupt virtually overnight.
2. Shop before you buy
A lot of companies sell auto insurance, so it is worth your time to shop before you sign up for your policy. It is incredibly easy to do this online in a matter of minutes, but make certain you are comparing apples to apples. To aid in the shopping process be prepared to deliver some information that includes your vehicle, what you use it for, where you live, how many drivers in your household and how much you drive. Be aware that some insurers are much better than others in terms of response to claims, so include customer satisfaction in your research in addition to just sampling rates.
3. Don’t “set it and forget it”
Many people sign up with an insurer and then simply renew their coverage year after year after year. But just as it is valuable to shop around when you first buy your insurance, it is also valuable to at least do a spot check each year to see if another good insurer might save you money. You can do this simply by going onto one of the many online insurance portals.
4. Seek out discounts
Car insurance companies offer a number of discounts that are supported by the premise that if you are in certain categories you are a better risk. A “good driver” discount is a no-brainer example, but insurers also offer discounts to good students, graduates of driver safety courses, owners of vehicles with advanced safety devices and those who don’t drive much, among others. Look for these individually and in combination because they are money-savers.
5. Be judicious about coverages
In setting up your car insurance coverage you should be thoughtful about what coverages you need and what coverages you don’t need. For instance, if you are a high net-worth individual or even if you simply own an expensive home, skimping on your liability coverages can hurt you because if a judgment against you resulting from an auto accident exceeds your insurance coverage, you will have to pay out of pocket. Such a finding could leave you penniless. On the other hand, it makes little sense to carry collision coverage on an old car that isn’t worth much.
6. Set up an intelligent deductible
The typical car insurance policy features a “deductible,” an amount you pay before the insurance company steps in. A higher deductible normally reduces your premium cost because you won’t submit small claims and because the insurance company’s portion of the overall cost starts after you’ve paid more. These days deductibles range anywhere from $100 to $2,500. Choosing a high deductible like $2,500 could result in significant savings on your monthly premiums.
7. Be a careful when you drive
It stands to reason that if you avoid getting into accidents, you should be able to save money on your vehicle insurance. Put the phone down, don’t text-and-drive and reserve emotional discussions for times when you are not driving. Beyond that obey traffic laws. “Moving violations” indicate to insurance companies that you engage in risky driving behavior. And they make you pay for it.
8. Pay your bills
A few states don’t permit insurance companies to use your credit history as a factor in setting your insurance rates, but most do. If you live in such a state you must realize that if you don’t pay your bills or otherwise abuse your credit you will pay with higher insurance rates. This also implies that you check credit-reporting to make certain there are no errors on your record. If divorce, layoff or medical problems throws your credit over the cliff, contact your insurer and explain the situation.
9. Choose a car that won’t up your rates
Some vehicle types — sport coupes, for example — attract driver-owners who are comfortable taking more risks than other drivers. You might be the safest, most careful driver on the planet, but if you choose to drive a 500-horsepower super coupe, you can expect to pay more for your insurance than if you’re driving a mid-size SUV.
10. If you start to drive less tell them
The more miles you drive the more you and your car are exposed to accidents. Yes, your car can be hit as it sits at the curb. Yes, the roof of your garage could collapse on it while you sleep. But your major exposure comes when you are driving. So if you take a new job that involves less time on the road, let your insurance company know about it.