Car insurance, for most households, is a necessity. Once you figure out what it takes, there are a variety of ways to save on this cost. However, depending on your lifestyle, type of car, and to a lesser extent, profession, insurance premiums will vary considerably from one company to the next. That is, every car insurance provider has their distinct algorithms with which they use to weigh risks and determine your insurance premiums.
This means while one driver may be getting a cheaper auto insurance policy and another driver in the same state may be complaining of high premiums on their insurance. As such, saving on your car insurance comes with lots of considerations. However, you can start by buying an affordable car that is cheaper to insure, increasing your deductibles, and taking advantage of available insurance discounts.
You can also compare insurance providers like Geico, State Farm, Allstate and drop collision coverage on your older cars. Through these simple ways, you can enjoy lower rates and even save more for your out-of-pocket expenses.
How to lower your car insurance costs
Car insurance is a cost that many people wish they could do without as much as it is a legal requirement. But before you hit the road, your car must be insured. The costs involved to insure a car aren’t always factored by most aspiring new car owners. Once you understand what it takes to save on car insurance costs, you won’t put a foot wrong.
Either way, you can get started by gathering your personal information and establishing a budget within your limits. Then you can weigh out the options for the appropriate insurance coverage that will best suit and safeguard your lifestyle. That said, here are some of the ways you can save on car insurance costs.
Purchase a car that’s cheaper to insure
Buying a car of your liking is a decision that best rests on your shoulders. You can choose to buy the latest expensive sports car or go with what will be friendly to your pocket. However, the moment you factor in insurance costs, you might want to consider my suggestion. Take, for instance, a sports car and a small SUV. You have a bigger chance of saving money on car insurance with a small SUV than a sports car when comparing the two.
Whatever the state or jurisdiction, small SUVs are among the cheapest and cost-saving cars to insure. Therefore, check out the average premiums for cars before walking into the dealership. Also, compare the insurance and maintenance costs before buying any vehicle. Such information can be obtained for free on websites such as Insure.com, which has a car insurance premium comparison tool that will help you budget for your car’s insurance costs without running into surprises.
Up your deductibles on collision and comprehensive coverage
If you are relatively new to this subject, allow me to shed some light here. The deductible is the total out-of-pocket amount you must put down before your auto insurance coverage can take effect. That said, higher deductibles mean lower premiums. And increasing your deductible on collision coverage and comprehensive policy from $500 to $1000, for instance, could save you between 20 to 40%. However, the sticking point on the deductible is that you must make sure it is an amount you are comfortable with and must be able to pay in the event of an insurance claim.
Compare rates with at least three insurance companies
The trick with auto insurance is not to hop on the first available instant quote with an insurance agent. Remember that car insurance rates differ considerably from one company to the next for the same coverage level.
That’s mainly because insurance providers have unique algorithms that they use to weigh risk factors and set premiums. That’s why you could help your course by looking at at least three insurers before signing off on your insurance policy. While you’re at it, don’t just shop on prices alone. It helps to check out company reviews, reputation, and customer satisfaction information as well.
Inquire about other auto insurance discounts
Auto insurance providers such as Geico, State Farm, and Allstate have different and, of course, friendly insurance discounts to their customers. And with such numerous insurance providers across the country, you can never run short of insurance discounts to find the cheapest car insurance. While some vary by state, these discounts can be modest but worthwhile at the end of the day. That said, remember to ask your insurance agent to review all the deals at your disposal to determine the ones you might be missing out on.
According to Insure.com’s official website, some of the modest but surprisingly most significant money-saving insurance discounts on the national scale include:
- Good student – 7%
- Bundling auto and home insurance – 11%
- Student away – 14%
- Bundling auto and renter insurance – 5%
- Bundling auto and condo insurance – 10%
These savings work on the basis that most insurance providers are more inclined to offer you extra discounts when you purchase more types of coverage from them. The most common insurance policies that you can bundle together with auto from most insurers include:
- Home insurance
- Boat insurance
- Motorcycle insurance
Save more with accident forgiveness
Having a good driving record typically keeps your premiums at a minimum. But in the real world, there are times when even great drivers get into accidents. That said, you can consider taking advantage of Minor Violations and Accident Forgiveness provisions if they are available in your state of residence.
Taking advantage of such optional safety features may go a long way in limiting premium increases in the event of your first covered minor violation. Other optional features you could take advantage of include lowering your deductible and total loss deductive waiver. But this is a luxury you can enjoy for select carriers, and only if you fit the bill of a driver with a good driving record.
Determine what car insurance you no longer need and ditch it
If you possess an older or beat-up car and are looking for ways to trim your car insurance costs. Then consider ditching collision and comprehensive coverage on your older car. Then, all you have to do is weigh the value of your older car and the cost of your premiums and establish what makes sense for you and your lifestyle. That’s because, with an old car, chances are you are paying dividends that sum up to more than what your vehicle is worth.
The bottom line
Car insurance is a necessity for most households, yet a cost that most wish they could do without. However, auto insurance is a legal requirement, and both new and veteran drivers must have it before hitting the road. The basic principle with insurance is that the more informed you are with what it takes, the less you are likely to pay for it. You can do a driver training course, cut costs by bundling auto with home or renter insurance or drop the collision and comprehensive coverage entirely on your old car to save on your car insurance.