Auto insurance is something that every driver needs. It prevents you from getting into legal trouble, spending a fortune on car repairs and medical treatments, and reimburses you in case your car gets totaled or stolen. There’s no doubt everyone wants these qualities in their auto insurance policies. However, what they do not want is the high prices of auto insurance policies and premium rates.
Is there no way of reducing the cost of car insurance? There are many ways you can bring down the cost of vehicle insurance, but the problem is that you need to follow all these tips to save money. There are some factors that you cannot change and they will increase your insurance rates. But the factors you can control will certainly help in reducing the damage to your wallet.
Let’s take a look at all the different ways you can cut the cost of your car insurance.
The journey of saving money on a car insurance policy starts before buying any policy. It is very important to do your best research and find the most affordable and suitable auto insurance company for you. If you miss this step and choose an already expensive car insurance company, then saving money becomes a lot more difficult.
Everything you need to know about almost every auto insurance company is available on the internet. Many websites take some basic information about you and show you all the different policies and estimated prices of the policies.
For example, if you live in Texas, all you need to do is look for Texas car insurance quotes and you’ll get dozens of different auto insurance companies, the coverage details, and the price of their policies. How easy it becomes to make the right choice.
But do remember that cheap is not always better, especially when it comes to auto insurance. You need to balance affordability and coverage. Get policies with proper coverage, great customer support, faster claim processing, and nationwide operation. Choose the best company that suits your needs well.
Once you have chosen the perfect car insurance company for you, now is the time to adjust the deductible amount. Auto insurance companies need you to set an amount that you’ll have to pay before the insurance company pays the rest of the policy amount.
For example, if your insurance deductible amount is $1,000, and the total cost of repairs to your car is $5,000, the insurance company will pay only $4,000 and you’ll have to pay the thousand dollars yourself. Those are the rules.
A higher deductible will decrease the insurance premium rates, while a lower deductible will increase premium rates. So you can increase your deductibles and save money by paying less in insurance premiums. But be careful, as a higher deductible means that if you get in an accident, you’ll have to pay more from your pockets.
Increasing the deductible amount is the faster way of reducing car insurance expenditure, but it must be done with proper thinking.
Needing multiple insurance policies or multiple cars can help you get great discounts. Firstly, let’s look at multiple insurance policies and bundling of insurance.
People don’t just have one type of insurance policy. Auto insurance, health insurance, renters insurance or homeowners insurance, etc are some of the most common examples. There’s a great way of getting great discounts if you need multiple policies; buying all the policies from the same insurance company.
Buying multiple insurance policies from the same company is called bundling insurance policies and it cuts off a big chunk from the price tag. You can save as much as 35%-40% by bundling insurance policies.
Multiple car discount is for people who own more than one car. If you insure more than one car from the same auto insurance company, you get great discounts. You can save as much as 25%-30%.
But before you choose any company, contact them and know all about the discounts you’d get for both bundling and multiple car insurance. Then select the company that offers the best deal.
This one is not a shocker. Your driving record plays the most important part in deciding your auto insurance rates. People with bad driving records are charged the highest for the same policy that a person with a good driving record can get for a much lower price.
Bad driving records include drivers with speeding tickets, rash driving, points on their driving license, DUI charges, accidents, etc. Any of these charges will increase your auto insurance rates. So the best way to avoid paying a high price and bringing the cost down would be to drive safely and avoid getting tickets.
Getting into defensive driving courses or something similar will also help in reducing your car insurance rates. Contact your auto insurance company and check if they consider any specific defensive driving courses and if they do, then enroll in one.
It might sound counterintuitive, but sometimes, you should avoid making insurance claims. Let’s say that you crash your car and the cost of repairs is around $1,500. If the deductibles are set at $1,000, then making an insurance claim would get you just $500. But the problem is that by making an insurance claim, you’ll lose all your no-claims bonuses and your insurance rates will go up.
So is getting your insurance rates up forever worth the $500? While $500 is just an arbitrary figure, whenever you get in an accident, you should consider the amount you’d get after the claim and the increased rate of auto insurance forever. If you are comfortable in paying the total amount for repairs yourself, then go for it.