Your car insurance rates will be based on several factors, including your age, the model of your car, and the number of miles you drive annually. What you might not know, however, is that there are other ways to get the best rate possible. The tips below will help you cut costs when it comes to your car insurance so that you can focus on what’s most important in life – driving your car!
1) One of the biggest factors in getting better rates is establishing good credit
Your credit history is a significant factor in determining rates and underwriting, so take care of your credit by making on-time payments. For example, if you use a savings account as collateral instead of offering an up-front deposit, make sure that account doesn’t have negative activity. That could reflect poorly on you.
2) Shop around – Don’t just stick with your current company
It’s worth it to look around and make sure you’re getting a good deal on car insurance. It only takes a few minutes to see if another company will give you a better price or coverage for what you want. If so, start fresh with that one!
3) Don’t forget about things like high-risk auto insurance
If you have more than three moving violations in any given year or a conviction of driving under the influence (DUI), you could be classified as a high-risk driver. If so, expect your auto insurance rate to skyrocket. Your driving record will dictate what kind of quote you receive. High-risk auto insurances are designed for people with bad records and who are willing to pay a higher premium in order to still be insured.
4) Insurance companies want you as a customer, so shop around!
It’s easy, quick, and free. Before choosing an insurer, it’s worth doing a little research. Check out price comparison websites like MoneySupermarket or finder. These sites will show you current market prices from different insurers – make sure to also check their customer reviews as well as information on other services they provide (such as breakdown cover) which can make their overall package more attractive.
5) Check out these tips from other websites or blogs
There are a lot of websites out there that can help you check for any negative marks on your driving record. You can also see if you qualify for discounts based on things like not having multiple tickets or accidents in one year, being a student, and adding someone to your policy. Different policies will also have different requirements so it’s important to read up before buying.
6) Choose how you want to make payments for your policy
The first decision you’ll have to make is how you want to pay your premium. You can choose between making monthly payments or paying in full every year (known as a single premium). Each option has its own pros and cons, but you should probably stick with a monthly plan unless you’re paying off a home equity loan or refinancing another debt on top of your auto policy. If that’s the case, then go ahead and pay in full if it’ll save you some money. It’s all about balance.
7) Consider dropping some coverage if you don’t need it anymore
Insurance companies sometimes sell people additional coverage they don’t need or want. If you decide not to drop a particular policy, make sure you understand what it covers and how much it costs so that you aren’t paying money for something you could do without.
8) Get proof of any discounts you qualify for
Discounts are one of those things that almost all companies offer, but it’s also something that most people don’t claim. It could be because they forget or just don’t know how to find them, but whatever the reason, you shouldn’t let a discount go unclaimed. Before you shop around for quotes, ask about discounts on both auto and home insurance.
9) Use an umbrella policy if needed. It covers you in case anything major happens
You’re in a major accident, or injured in another person’s accident, or if you cause an accident and are sued. Umbrella policies give additional coverage past what is provided by your personal policy, usually up to $1 million. This can cost less than $100 a year. If you think you will need more coverage than your policy provides, purchase an umbrella policy in addition to standard auto insurance.
10) In most states, they require you carry certain types of coverage. Know what they are.
In every state, you need what’s called insurance liability coverage. This is typically referred to as Bodily Injury Liability and/or Property Damage Liability. (When referring to yourself, you might see it written as BI/PD.) This coverage protects you if you cause an accident or are sued because of one. In most states, that means at least $25,000 per person injured in an accident and $50,000 total per accident.