And the insurance rates you pay are hugely dependent on the
insurance company or agent, your age, your car type, your driving
record, and even the area you reside in!
You should never go without auto insurance though, despite the costs.
Almost all the states require you to protect yourself with a minimum
amount of liability coverage. Naturally, the bare minimum is not
adequate enough for the average car owner. And as you add in additional
coverage for your car, you realize that you will be paying a fairly
large sum annually.
So, understanding auto insurance can actually help you to decide on a
suitable insurance policy that won’t vacuum clean your wallet! Here, we
have gathered 10 of the best tips for lowering your auto insurance, by
as much as 40%!
Always compare insurance policies. There are states which regulate
auto insurance rates, but the insurance premiums can vary by hundreds of
dollars for the exact same coverage. It is definitely worthwhile to
shop around. The first thing you can do is to check with your state
insurance department. They often provide information about the coverage
you need, as well as sample rates from the biggest companies. You can
also ask your friends or look up the yellow pages. Checking consumer
guides and asking insurance agents can pay off as well. You can easily
find out the price range for your insurance policy, as well as discover
the lowest prices in town.
However, you should not be shopping based on price along. The
insurance company should provide good service at the best price.
Excellent personal service is available as well, and they provide added
conveniences, although they cost a fair bit more. Ask the company how
you can lower your costs, and also check their financial ratings. The
rule of thumb is always to get three price quotes from three different
companies, and pick the one with the best value.
It can also be a good idea to increase your deductibles. When you
file a claim, the deductible is the amount you pay before the insurance
company pays for the rest of the damage. A higher deductible on
collision and comprehensive coverage can lead to a much lower premium.
For example, increasing your deductible from $200 to $400 can reduce
your premiums by up to 25%. However, you must ensure that you have the
financial resources to handle the largest deductible when the time
comes.
Remove certain types of coverage from your policy. Almost all the
states require liability coverage for your car, but the rest of the
coverage is probably dispensable. However, you do not want to be
underinsured if you’re in an accident, so it isn’t advisable to remove
all of your additional coverage. Optional coverage includes medical
payments, uninsured motorist, collision, and comprehensive coverage.
Drop collision and comprehensive coverage for older cars. If you
drive an older car that’s worth less than $2,000, it’s probably more
cost-effective to drop collision and comprehensive coverage since you’ll
probably pay more for the coverage than you’ll collect for a claim. You
can find out the worth of your car by asking auto dealers and banks.
Make sure your credit report looks good. Car insurance companies
often look at your credit history as there is a correlation between the
risk to the company and your credit history. If you pay your bills on
time and maintain a good credit history, you can enjoy lower insurance
rates.
Drive less. Insurance companies often offer low-mileage discounts to
motorists who drive less than a predetermined number of miles each year.
You can use public transportation more often, car-pool with friends,
and take the train or a plane instead of driving to another state. And
you’ll save on more than your coverage as you’ll need to spend less on
gasoline (of which prices are incredibly high).
Maintain a clean driving record. The company will give you a price
break and you can save on your insurance policy after a specified period
of a clean driving record. This means that you have no accidents, no
serious driving violations etc, during this period of time. The simplest
and surefire way to qualify for this discount is to drive carefully and
defensively all the time.
Choose a low-profile car. Insurance rates vary among difference
models of vehicles. Generally, sports cars and high-performance cars
tend to cost more to insure, mainly because they represent more risk of
theft and the drivers are often the people who drive more recklessly.
Newer cars will cost more to repair or replace than older ones, so
naturally they can more to insure. Low-risk vehicles include station
wagons and sedans.
Ask about safety and security discounts. The insurance companies
sometimes offer discounts on your insurance if your car is equipped with
the following: anti-lock brakes, air bags, automatic seat belts, car
alarms, tracking systems. These reduce the injury risk to you, as well
as the chances of your car being vandalized or stolen.
Finally, ask about other discounts. You may receive a discount if you
buy more than one type of insurance from the same company or if you
insure multiple cars under the same policy or company. You may also
receive discounts for taking a defensive driving course, staying with
the same company for a few years, being a driver over 50, good-student
discounts, and being an AAA member. If you already have adequate health
insurance, you can also eliminate paying for duplicate medical coverage,
thus lowering your personal injury protection costs by a substantial
amount.
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