Though auto insurance is expensive, it is something that can't, and should not be avoided. However, there are a few ways through which you can bring your insurance premiums down. Here are a few simple steps that will help reduce your auto insurance premiums significantly.
Did You Know?
Your auto insurance premium can also depend on where you live. Louisiana, Kentucky, West Virginia, Michigan, and Mississippi are the most expensive states when it comes to auto insurance premiums.
Contrary to what most people say, auto insurance is necessary, and no, it does not have to burn a hole in your pocket. It does not matter how good one’s driving skills are, accidents are bound to happen, and if the car involved in the crash does not have an insurance cover, major financial and legal troubles can surface.
Also, auto insurance does not have to be that expensive. There are many ways through which customers can decrease their premium rates. For example, the location of a customer can play a major role in determining premium rates.
Insurance companies tend to offer lower rates to rural citizens in comparison to those who inhabit bigger cities. While not all of us can leave the city and move to rural areas just to lower auto insurance costs, the important point to remember is that auto insurance costs can be brought down.
Tips to Reduce Auto Insurance Premium
Look at Different Insurance Plans
Before finalizing a particular company, research, obtain quotes online, and have a word with several insurers. There are chances of getting a better insurance plan for the same or lesser amount, from another auto insurance provider.
Most customers fail to compare rates offered by several insurance providers, and hence, pay higher premiums. In certain cases, insurance providers may consider giving discounts if they find the customer is looking out for better deals.
A guaranteed way to save money on auto insurance is to increase the deductible – the amount that the insured pays out of pocket before the insurer pays any expenses.
By increasing the deductible, the insurance premium rate will drop, as the insured pays a larger share of the financial responsibility.
Avoid Duplicating Medical Coverage
Most auto insurance policies offer their customers personal injury protection and medical coverage. But paying extra for these benefits makes sense only if the customer isn’t covered by any existing health plan.
Having double health coverage isn’t necessary, although it is advised to have a look at the existing health plan to check whether it covers injuries incurred in automobile accidents.
Avoid Expensive Cars
The price of a Lamborghini, Porsche, or a Ferrari is very high, hence, their insurance premium rates will also be higher. Why? Because these cars are expensive to repair, and are popular among car thieves.
Hence, for those who want to save money on insurance premiums, avoid sports cars, expensive cars, and cars that aren’t considered safe by the NHTSA (National Highway Traffic Safety Administration).
Improve Credit Score
An increasing number of auto insurance providers are now considering credit scores while determining premium rates. Insurance companies can charge a high premium rate to people with a bad credit score.
Hence, it is advised to pay all bills on time, and keep a tab on your credit score to ensure it’s free from any incorrect information.
Maintain a Clean Driving Record
Driving etiquette also plays a big role in determining insurance costs. It sounds strange, but companies do look back three to five years to check if the customer has been involved in any traffic violations or has received speeding tickets.
Certain companies are ready to offer heavy discounts to customers who have installed monitoring devices that keep a track on the speed, braking, and the number of miles covered.
Many companies offer great discounts for citizens over 55 to 60 years, if they have maintained a clean driving record, or have been long-time customers.
Parents can also ask for teen discounts if the young driver has taken a safety driving lesson through an accredited driver’s education program. Heavy discounts are also offered to students who go to college more than 100 miles away from home without a car.
Customers who really don’t drive much can avail a heavy discount from insurance companies. Some of them even offer an impressive 25% to 40% discount to drive fewer miles, but these savings come at a price.
To keep a tab, the insurance provider will install a tracking device in the car. This device will keep a tab on the number of miles driven, and also note down the speed of the vehicle.
These are some tips that can help people save a significant amount of money on auto insurance premiums. However, it is advised that before selecting an insurance provider, check its history and how well it has performed over the years.