In America, just about everyone needs car insurance. It’s a legal requirement in most states that must be met before driving a vehicle. Dealing with car insurance can be tricky and frustrating, though, because there are so many factors to consider. And let’s face it, nobody really wants to fork over a few hundred dollars every month just to be able to drive the car that they already spent money on.
Many people are adequately covered by their vehicle insurance policy, but do not realize that they may be paying more than necessary for what they’re getting in return. It’s possible that other car insurance agencies out there are willing to provide the same quality of insurance at a lower price.
Here are a few ways in which you can get the best insurance coverage for your car without having to sacrifice an arm and a leg. Your wallet will thank you for it.
#1: Buy Only What You Need
The very first thing you should do when considering car insurance is figure out exactly what you need and what you don’t need. You can do this by reviewing your current coverage with an agent, and you should continue reviewing your coverage on a periodic basis, usually once a year.
Carefully consider what you will need and drop the things that you won’t need.
For example, if your car isn’t all that great and has very little value, it may not be worth insuring against theft and it may be more economical to drop collision coverage and pay for repairs out of your own pocket. When your car is involved in an accident, you receive an amount equal to your car’s worth. It probably isn’t worth handing over extra premiums every month when your car is only worth $1,500.
#2: Compare Multiple Insurance Providers
It should be a given that prices will differ depending on the company you choose. That’s the nature of capitalism. Once you know exactly what kind of coverage you need and don’t need, it’s easy to obtain accurate quotes from various insurance companies. Tell each company the same thing – exactly what you need in your coverage – and comparison between them should be a piece of cake.
Furthermore, the car insurance market is prone to relatively frequent fluctuations in price. Just because one company offers the best prices this year doesn’t mean that they will offer the best prices next year. Brand loyalty is honorable, but if you’re looking to save money on car insurance, you’ll need to shop around every once in a while and keep up with the market.
#3: Ask for Higher Deductibles
In an insurance policy, a deductible is the amount of money you have to pay out of your pocket before the insurance company will fork over any money. This means that when you have a policy with a higher deductible, you won’t have to pay as much every month.
However, asking for higher deductibles is not always the best choice, so exercise caution and discernment. Make sure that an increase in your deductible is worth the decrease in monthly premiums.
Lastly, if you do go with a higher deductible, make sure you can afford it. There’s little sense in having a policy with a $1,500 deductible if you can’t manage to pay it in the event of an accident.
#4: Increase Your Policy Length
Some insurance agencies increase prices for shorter-duration policies. Consequently, you may be able to save a lot of money if you purchase a policy that lasts a long time.
The drawback to this option is that car insurance prices at different companies fluctuate regularly. Your current long-term policy may not be the best policy a year or two down the road. Keep this in mind when you make your decision.
#5: Drive Responsibly
If you want to maintain low car insurance premiums, give your insurance agency a reason not to raise your rates. Being involved in car accidents – whether or not you were the cause – means that you are a greater risk for your insurance company, and they will compensate for that risk by increasing your rates.
This increase in your rates may last for up to 3-5 years, and it’s difficult to prove that you’re a safe driver when you’ve been in multiple accidents.
Similarly, receiving tickets for speeding and driving irresponsibly are indications of unsafe driving practices, and these will also increase your monthly premiums.
#6: Take Advantage of Discounts
Many insurance agencies offer various discounts, and it would be foolish not to take advantage of them. Some discounts for which you may qualify are low-risk occupation discounts, combined and renewal discounts, and organizational affiliation discounts.
What do all these mean?
Low-risk occupation discount: Over the years, there have been trends that show certain occupations to be statistically less likely to be involved in vehicular accidents. If your occupation is considered low-risk, you may be eligible for this discount.
Combined and renewal discount: Some agencies offer discounts when you insure both your car and your house with the same company. Furthermore, some agencies offer discounts for customers who have been with them for a long time.
Organizational affiliation discount: Being affiliated with certain professional organizations, like the American Automobile Association (AAA), can result in lower insurance rates. Ask your agent for more information.
#7: Drive a “Low Profile” Car
Cars that are more expensive to repair and more likely to be stolen will fetch higher insurance premiums. If you are considering a new car in the near future, make sure you take into account the car’s average insurance costs and safety ratings, because they will impact your monthly rates.
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