Auto insurance is one of those things that you can't live without. Most states have laws that say you must have at least the minimum coverage. You can't get around this, so you might as well use the tips below to save money and get the most out of your insurance.
First, think about how much your car is worth.
Let's face it, automobiles depreciate (or lose value) very quickly. When you drive a brand-new car off the lot, the "new" value drops quickly to the "used" value. Regardless of how well you take care of your car, it will lose a lot of value in a short amount of time.
If you've paid off all of your car's debts, find out from your old lender how much the car is worth. If this amount is the same as or less than what your collision insurance premium will be, you don't need collision insurance. You would pay almost the full value of your car every year, whether or not you had an accident. If this is the case with your car, you can save a lot on your car insurance by leaving off the collision coverage.
Tip No. 2: Don't get a traffic ticket.
The main reason why insurance rates are so high is because of tickets for speeding or other moving violations. When you drive fast or don't follow the rules of the road, you are called a "at-risk" driver, and your insurance rates go up for a few years. If you drive carefully and follow the rules of the road, your insurance rates will stay low and fun.
Tip #3: Know what your insurance covers
Depending on where you live and what kind of car you have, you may not need all of the coverages. For example, theft insurance might be a good idea if you live in a big city where cars are often stolen. But if you live on a high mountain 40 miles from the nearest town where thefts are very rare, you don't need to pay the extra premium for this type of coverage.
There are a lot of coverages that you can choose not to get, but are still helpful. You'll have to look at each policy carefully to decide if you need it or not. Find out what "full coverage" means if your insurance company says it does. If you don't need all of the included coverage, it might be cheaper to pay for only a few of the options separately. This depends on your needs, how much your car is worth, etc.
Auto insurance deductibles are the fourth tip.
Even though most people don't like high deductibles, they can actually work in your favour and save you a lot of money on your premiums each year. The idea behind a deductible is to make the driver more responsible and the insurance company less so. In turn, your annual premium could be a lot less.
A $1,000 deductible seems like a lot, but if it saves you $200 per year on your insurance premium, it's well worth it! Keep in mind that you will only have to pay the deductible if you have an accident that requires insurance. If you don't, you get to enjoy the lower rates every year.
If you choose a policy with a high deductible, you might want to put some of the money you saved on premiums into an emergency fund. That way, if you do have an accident, you'll have some or all of the money you need to pay your deductible.
Tip #5: Compare different insurance plans
Compare insurance plans before you sign up for one. This is another way to save money. You'll want to compare not only the different policies, but also the prices and insurance companies.
Note of Caution: If the price is very low, don't sign up too quickly. If you can, ask for references or ask around to see if anyone else has worked with the company. Some companies that advertise low prices have terrible customer service and take a long time to process claims, so you should always be careful.
A great way to compare California insurance companies is to use online tools. You might also find discounts online, which could save you even more money.
Use these simple tips to save money on your premiums and get a great plan that meets your needs when you choose an insurance company and coverage.
