You need a car to get around, and you need to insure your vehicle to protect it from damage, and to protect yourself and your assets against liability while driving. If you run a stop sign and hit another car, you could be facing crippling expenses if you don’t have sufficient car insurance.
Insuring the family car can be expensive – especially if you fall into the high-risk category: drivers deemed higher insurance risks because of age, past driving record, local driving conditions, and other factors.
However, by taking a few simple steps when you get behind the wheel you can lower the cost of insuring your family car, and possibly save hundreds of dollars on insurance costs, and still keep you, the family, and the car protected.
Here are some simple tips to cut your car insurance costs and still be covered when driving.
1. Shop around. Contact an insurance broker who carries a number of policies from several different reputable insurance companies to find the best price for the most insurance coverage protection. You might be surprised at how much you can save simply by comparison shopping, or having your local insurance broker do the comparison shopping for you.
2. Bundle coverages with the same insurer. Many large insurance companies cut the per-policy premiums when you insure your home, car, boat, and valuables with the same company. You’ll also enjoy the convenience of using a single insurer that provides all your coverages.
3. Ask for discounts. Insurance companies often offer numerous discounts. If you pay for a year’s coverage in one payment you can save the monthly fee often charged by insurers when you pay monthly. Safe driver discounts, discounts for seniors, discounts for safer vehicles – talk to an insurance broker about the discounts available to you and your family.
Ask about discounts for:
- low annual mileage
- no moving violations
- no accidents
- anti-theft devices
- loyalty discounts for long-term insureds
- multi-vehicle discounts
- age-specific discounts that often start when you turn 50
- good-student discounts for kids who maintain a grade point average of 3.0 or higher.
4. Raise your deductible. The difference between insurance premiums on a policy with a $200 deductible and a $2,000 deductible adds up month after month, year after year. The deductible is what you pay before your auto insurance kicks in, so do the math. If you can “self-insure” by assuming some of the risk, increase your policy deductible. Sure, you’ll pay more if you have a fender bender, but you’ll also save on car insurance if you pay the first $2,000 in repair costs.
So, ask your insurer how much you’ll save each month with a higher deductible. Add up each month’s savings to determine your break-even point – the point at which paying a higher deductible starts saving money, even if you have to pay the first $2,000 in repair costs.
5. Don’t over-insure. If you’re driving around in a 15-year old clunker, you can probably drop the collision coverage. One more dent probably won’t make a big different in the value of your car. Take the money you would have paid for collision coverage and put it into a “new car” fund.
6. Pay as you drive. Some insurers provide a monitor that tracks how many miles you drive, the hours you’re most likely to drive, the number of times you slam on the brakes, and other factors that indicate safe driving practices. Then they adjust rates accordingly. Drive fewer miles, or drive less at night, and you may be able to save on car insurance premiums.
7. Keep a clean credit report. Insurance companies often pull credit histories of potential customers. A clean credit report may indicate a responsible adult who drives with care. A poor credit report may indicate a lack of concern about managing costs and paying bills on time. Cleaning up your credit history may help lower car insurance costs.
8. Take a defensive driving course. Some insurers will lower premiums after you, or your teen drivers, take an approved, certified safe driving course. You’ll pay for the course, but you’ll save on premiums every year.
9. Choose your vehicle with insurance in mind. It may cost more to insure a fast-as-lightning muscle car than a family van. Talk to your insurance broker before you buy a car that’s going to cost more – a lot more – to insure.
10. Use mass transit or carpool. The fewer miles you drive each year, the more you may be able to save. You’ll save on insurance, gas, wear and tear on the car, and you’ll help keep our environment cleaner when you carpool each day to work.
You can cut automobile insurance costs by driving safely and being a smart consumer. Shop around, get every discount coming to you, and maintain a good driving and credit record to see big savings on car insurance.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.
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