How To Save Big On Car Insurance
Are you tired of paying too much for car insurance? If so, check out these seven ways to save big.Tweet
In most states, carrying car insurance is mandatory. But paying too much for that insurance doesn't have to be. Fortunately, there are many ways to lower your rate and save big.
According to the Insurance Information Institute (III), auto insurance premiums can vary by hundreds of dollars across insurance companies and depending on car type.
But there are many other minor factors that could also be affecting your premiums. Keep reading to learn about them and to discover seven ways to potentially lower your rate.
Savings Tip #1: Do Your Homework
Yes, yes, we know. This is just another way of saying "shop around," which is about as useful a tip as advising you to drink when you're thirsty. Pretty obvious, right?
Wrong. The fact is, many people shop incorrectly when it comes to auto insurance, says Loretta Worters, vice president of communications with the III. To make sure you're an informed and savvy consumer, here are two tips on how to shop till your rate drops:
Quick Shopping Tips*:
- Get quotes from at least three different companies.
- Give the exact same information to each company so you're comparing apples to apples.
Saving Tip #2: Increase Your Deductible
Want to lower your rate? Lower what the insurer pays when you file a claim. That's right, if you raise your deductible, which is the amount you pay out-of-pocket before your insurance kicks in, you'll likely lower your rate, says Worters.
How much? Well, according to the III, "Increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more."
Quick Deductible Raising Tips*:
- Be sure you have enough money set aside to pay your higher deductible in case you need to file a claim.
- Before raising your deductible, call your insurance company to make sure your rate will decrease.
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Saving Tip #3: Lose Unneeded Coverage
Do you drive a car that looks like it just lost a demolition derby? Well, even if it isn't that bad, you may want to consider whether or not you need collision and/or comprehensive coverage, which cover the cost of fixing damages to your vehicle or replacing the vehicle.
But here's the thing, says Worters: Many people merely renew their policy year after year as their car ages. After enough years, the car is not worth the cost to insure its collision and/or comprehensive coverage.
Quick Coverage Check Tips*:
- According to III, "If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective."
- Check with banks, auto dealers, or Kelley Blue Book, the used car pricing guide, for the worth of your car.
- At renewal time, remember to review your needs. Remember, in life, the only constant is change.
Saving Tip #4: Carpool
It's good for the planet. It's good for your car. And it can be good for your pocketbook. Yes, you could save more than a tank of gas for carpooling. Do it enough, and you could qualify for a low-mileage discount.
"Depending on the insurance company, the state, and other factors, you and your fellow carpool drivers might qualify for discounts of 10 to 20 percent," says Worters. And as a bonus, you get more time with your fellow workers. Did we mention the planet-saving part?
Quick Carpool Discount Tips*:
- To qualify for a low-mileage discount, drivers usually must keep mileage under a specific number per year, which could be 7,500, 10,000, or even 15,000 miles.
- Don't forget to look into public transport or riding a bike, which has the added benefit of exercise.
Do you have a child that just flew the coop for college in a distant town? You could save big money by making him or her an "occasional driver," - as opposed to a regular one - on your insurance policy, says Worters.
"This type of change could result in up to a 50 percent rate reduction," she says. Why? Because drivers under 25 years old, especially male, are typically the most expensive to insure.
Quick Kid Dropping Tips*:
- To qualify as an "occasional driver,"typically the student must live more than 100 miles from home.
- If you must keep your kid on your policy, look into good student discounts, which kick in for students with B averages.
Saving Tip #6: Use Anti-Theft Devices
Keeping your car safe from thieves could save you more than police paperwork and a long walk home. Installing anti-theft devices in your car often results in a discount, says Worters. These include things such as alarms, ignition deactivation devices, and electronic tracking systems.
"The amount of the discount varies," says Worters, "but is typically 15 to 20 percent for passive devices, which are automatically activated when the vehicle is locked." In the best cases, a combination of an anti-theft device and recovery tracking system could save you more than 30 percent.
Quick Anti-Theft Tips*:
- The biggest savings are for passive vehicle recovery systems, such as LoJack. These systems are automatically engaged when a vehicle is stolen so that police can track it down.
- Another anti-theft savings opportunity is to park in a garage, since insurers consider street parking more risky.
Saving Tip #7: Buy a Safer Car
The cost of trading in the car you drive for a safer model might outweigh any savings in insurance rates. But if you're shopping for a new car, be sure to take its safety features into consideration. They could save your life and save you some money.
"Things like automatic seat belts, air bags, and Electronic Stability Control (ESC) help cars, SUVs, and trucks to be safer. And that could result in savings," says Worters.
ESC is a system that helps prevent cars from skidding in adverse road conditions so that the driver does not lose control of the vehicle.
Quick Safe-Car Shopping Tips*:
- ESC will be in every vehicle as of 2012 due to government requirements, according to the Insurance Institute for Highway Safety (IIHS). But if buying a used car, the IIHS website has a user-friendly search engine to find out which ones are equipped with ESC.
- For automatic seat belt and anti-lock brake info, ask auto dealers or check Kelley Blue Book.
*All tips from Loretta Worters of the III, unless otherwise stated.
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