Auto insurance is very expensive these days. A normal insurance policy can cost anywhere from a few hundred to a few thousand dollars per year.
And the rates you pay for insurance depend a lot on your age, the kind of car you drive, your driving record, and even where you live.
Even though it costs money, you should never drive without auto insurance. Almost all states require you to have at least a certain amount of liability coverage to protect yourself. The bare minimum isn't enough for the average car owner, of course. And as you add more coverage to your car, you realise that you will have to pay a pretty big amount every year.
So, knowing about auto insurance can help you choose a policy that fits your needs and doesn't empty your wallet. Here are 10 of the best ways to lower your car insurance by as much as 40 percent.
Always look at more than one policy. There are some states that regulate auto insurance rates, but the premiums for the same coverage can vary by hundreds of dollars. It is always a good idea to shop around. The first thing you can do is call the insurance department in your state. They usually tell you what coverage you need and give you examples of rates from the largest companies. You can also ask your friends or look in the yellow pages. It can also be helpful to look at consumer guides and talk to insurance agents. You can easily find out how much your insurance policy will cost and where the best deals are.
You shouldn't shop based on price alone, though. The insurance company should offer the best price for good service. They also offer excellent personal service and extra conveniences, but they cost quite a bit more. Ask the company how you can save money, and check their financial ratings. As a general rule, you should always get three price quotes from three different companies and choose the best value.
You might also want to raise your deductibles. The deductible is the amount you pay when you file a claim before the insurance company pays for the rest of the damage. When it comes to collision and comprehensive coverage, having a higher deductible can make the premium much lower. For instance, if you raise your deductible from $200 to $400, your premiums could go down by up to 25%. But you need to make sure you have enough money to cover the biggest deductible when the time comes.
Get rid of some of the coverage you have on your policy. Almost every state requires you to have liability coverage for your car, but you probably don't need the rest of the coverage. But if you have an accident, you don't want to be underinsured, so it's not a good idea to get rid of all of your extra coverage. Medical payments, uninsured motorist, collision, and comprehensive coverage are some of the optional coverages.
For older cars, drop collision and full coverage. If you drive an older car that's worth less than $2,000, it might be cheaper to drop collision and comprehensive coverage since you'll probably pay more for the coverage than you'll get back in a claim. Auto dealers and banks can help you find out how much your car is worth.
Check your credit report to make sure it looks good. Car insurance companies often look at your credit history because it shows how much of a risk you are to the company. If you pay your bills on time and keep your credit score high, your insurance rates will be lower.
Drive less. Insurance companies often give discounts to drivers who don't drive more than a certain number of miles each year. You can use public transportation more, carpool with friends, and instead of driving to another state, you can take the train or an aeroplane. And you'll save more than just on insurance because you'll need less gas (of which prices are incredibly high).
Keep your driving record clean. After a certain amount of time with a clean driving record, the company will give you a price break and you can save money on your insurance. This means that you haven't been in any accidents or gotten into any serious driving trouble during this time. The easiest and most certain way to get this discount is to always drive carefully and defensively.
Choose a car with a low height. Different kinds of cars have different insurance rates. Most of the time, sports cars and high-performance cars cost more to insure because they are more likely to be stolen and their drivers tend to be more dangerous on the road. Since it costs more to fix or replace a newer car than an old one, it makes sense that it costs more to insure it. Station waggons and sedans are examples of low-risk cars.
Ask if there are discounts for safety and security. Insurance companies sometimes give discounts if your car has anti-lock brakes, air bags, automatic seat belts, car alarms, tracking systems, or automatic seat belts. These make it less likely that you will get hurt or that your car will be broken into or stolen.
Last, ask if there are any other deals. You might get a discount if you buy more than one kind of insurance from the same company or if you insure more than one car under the same policy or company. You may also get a discount if you take a defensive driving course, work for the same company for a few years, are over 50, are a good student, or are a member of AAA. If you already have good health insurance, you can skip paying for duplicate medical coverage and save a lot of money on personal injury protection.
