In a struggling economy, people everywhere are constantly searching for ways to save money. Car insurance is an area that does offer the possibility of substantial savings if you shop wisely for a policy. Here are 5 important tips on how to save money on auto insurance.
Car insurance can take a big bite out of a monthly budget, yet coverage is essential to have and in most states a legal requirement. It is for your own protection to have adequate vehicle coverage, but how do you get the best policy for the lowest premium rate?
Tip #1. Shop Around
Every time the policy renewal date approaches, shop around for policy quotes. Don’t wait until the coverage has or is just about to expire. Allow time to shop thoroughly and compare quotes.
A company you received a quote from that was too high previously may be able to give better rates this time around, so don’t omit a provider just because they did not have the lowest rate before.
Obtain at least three quotes, and make sure all providers are quoting the same coverage. An incredibly low quote might mean lower coverage amounts, a higher deductible, or exclusions, so be sure to compare “apples to apples.”
Tip #2. Your Driving Record
Don’t attempt to hide facts about your driving record. This information is readily available to insurance providers and you are simply wasting your time in attempting to do so.
Even if you do manage to obtain cheaper auto coverage by not disclosing pertinent violations or at fault accidents (although it is highly unlikely you will), if/when the provider finds out (they will), you may end up with:
a) a terminated policy
b) an increase in your premium
c) back payments for coverage prior to discovery
System updates on driving records are not always in “real time,” although as technology progresses, so does the system’s ability to produce more accurate and updated information.
A violation on your driving record may no longer be subject to consideration for coverage rates yet not show up as “cleared” in the provider’s computer system. Review all policy quote information and if anything seems amiss or incorrect, don’t hesitate to ask questions.
Tip #3. Savings via Payment Options
Most all insurance providers offer savings for 6 and 12 month up front premium payments, and these incentives can be substantial. If you can swing the up front premium payment, it can result in more money left in your pocket.
Granted monthly premium payments are easier and more convenient, but if they are costing you $100 or more in coverage expense per policy period, it might be time to consider a change in payment frequency.
Tip #4. Policy Perks that Cost You
Go over every policy quote in detail for possible inclusions you don’t need. For example, you may not need towing coverage if you already have an auto protection plan (such as AAA) that covers it.
You may also decide that you prefer to go with a higher deductible to save on your insurance premium. Be certain to weigh the savings versus the cost; if you are only saving $10 every 6 months by going from a $500 to a $1000 deductible, it may not be worth the gamble.
Coverage amounts need not be excessive, but you should at least have the required minimums in your state. Don’t hesitate to do independent research on the internet about your state’s insurance requirements, and feel free also to discuss coverage options with your agent.
Tip #5. Young Drivers
If you have a young driver on your policy, you already know what this does to an insurance premium. There are savings incentives, however, for teenage drivers. Many providers give discounts for maintaining a minimum GPA in school, successfully completing a driver’s education course, and taking other industry recognized safe driving courses.
Be sure to ask your agent about all possible savings, and then make sure your teenager understands how important it is to make good grades, drive safely, and be a responsible driver at all times.
In summary:
- Obtain Multiple Quotes
- Driving Record Impact
- Possible Payment Option Savings
- Costly Policy Perks
- Young Driver Premium Reduction
While there is a need to include auto insurance premiums in your monthly budget, there are ways you can minimize the cost by doing a little homework up front. Shop around, properly compare quotes, and follow these five tips for potential policy savings.
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