Saving money is usually a big deal to most people. When the dollars saved come from a reduced rate on auto insurance, it can feel even better. Since most car owners know that buying auto insurance is not an option, finding it for the lowest possible cost is usually a priority. Here are 5 ways to keep those rates as low as possible.
Do not develop an attachment to your insurance company.
The auto insurance industry is big business and highly competitive. The rates being offered by insurance companies can have wide variations in products and cost. Some auto insurers like to pump up their premiums by adding extras onto the policies. Others will sell only a bare bones type of insurance to always look like they have the best rates in town.
The reality is that your insurance needs probably fall someplace between these two extremes. About once a year, take the time to get quotes from about 5 or 6 insurers that have offices in your area. Be careful to compare apples to apples, but do not be talked into buying coverages that you do not need. By doing this, you may be able to reduce your premium cost by up to 50%.
Only buy the coverages that you need.
All states issue minimum guidelines for acceptable liability insurance. Lenders all require that you carry collision insurance to protect their investment. Insurance companies want you to buy large amounts of both. If you have lots of assets to protect, you may need larger amounts of liability. If your car is paid for and getting some age on it, you might want to consider dropping the collision coverage. Buy your insurance with deductibles that you can live with. You may find that putting $500 or $1,000 into a special account to hold in case of an accident is a better idea than keeping an extremely low deductible.
Package other insurance with you car policies.
Almost all insurance companies will give you a significant discount if you have multiple policies with them. This shows up most often when you can have your homeowners policy from the same company as your car insurance. These discounts range from 10% to 25%. For people who do not own a house, you might be able to inquire about renters packages or other possible multi-product discounts.
Pay your entire premium at once or enroll in an automatic debit system.
Most insurance companies charge from $3 to $7 per premium payment if you do not pay for it all at once. If you can pay for 6 months or a year at a time, you will save these charges. This can lower your annual insurance cost by 10% in many cases. Some companies waive the premium charge with an automatic monthly or quarterly debit from your checking account. Ask about this possibility. Your company may charge the same either way, but you may be able to save some dollars here. Keeping a good credit rating can help bring down your insurance rates, also.
Be a better driver.
This is an obvious one for most people. However, there are many who believe that speeding is the only way to go down the highway. A clean driving record will always result in lower insurance premiums. On the other hand, it does little good to save a few hundred on insurance premiums if you have to pay a thousand to an attorney to bargain your ticket down to a non-moving violation.
Insurance rates are based partially on the number of miles that you drive each week. Carpooling and using public transportation can reduce the number of miles that you drive. If you can keep your annual miles driven under about 7,500 miles, this will make a big dent in the size of your insurance premiums. Along with this, if you can keep young drivers off of your policy, it will give you a nice reduction, too.