So you’re on the market for car insurance, and feeling a little overwhelmed with all the options to choose from. What do you need to know? Well first, it’s important to understand that there are lots of ways that you can save money on car insurance. Many of these money-saving ideas may apply to you.
Multi-Policy Discounts – If you have a renters insurance or homeowners insurance policy, check with your provider to see if they also offer automobile coverage. Almost every company that sells homeowners insurance or renters insurance wants its policyholders to also buy auto insurance from the same company. If you purchase several different types of insurance from the same company, you may be eligible for a so-called ‘multi-policy discount.’ In most cases, these discounts are at least 10%, and some insurers may even apply the same discount to all policies purchased with the same company.
Safe Driver Discounts – Everyone knows that better drivers pay less for auto insurance. But did you know that the vast majority of licensed motorists are qualified as ‘good drivers,’ and are eligible for substantial savings? However, some good drivers end up paying a lot more than others in the same category.
Most auto insurance carriers are, in reality, a collection of several companies that cater to different types of drivers. The best drivers are assigned to one company, the worst go to another, and the rest end up being insured by one of the middle companies.
The individuals in the middle usually end up paying less than the worst drivers, but substantially more than the best. The problem is that many of these people in the middle category have driving records that are just as good as those who are classified as the best drivers. Yet the ones in the middle still end up paying more. Why?
In most cases, it’s because they don’t know any better. No one ever told them there was a group of companies to choose from in the first place, much less that a particular company offers the best prices. If you have a solid driving record, there’s no reason you shouldn’t be paying the lowest price a group of insurers have to offer.
Mass Transit Options – If you drive to and from work, you should know that you are literally paying a premium to do so. Most insurance companies charge substantially more if you drive to work, and, in most cases, the longer your commute, the higher the premium you pay. Killingbeck Insurance & Tax Preparation advises drivers, whenever possible, to consider alternate methods of mass transportation to get to work. Yes, it may be slightly inconvenient, but it’ll pay dividends in the long run when it comes to gas and lower insurance costs.
Lower Mileage, Lower Price – Most people drive between 1,000 and 1,250 miles a month, and that’s what most insurance providers consider average use. If you drive substantially less than 1,000 miles per month, you could be eligible for low-mileage discounts. Contact your provider to learn more.
High Profile, High Price – Most people know that the type of vehicle they drive has a big impact on what they pay for auto insurance. Do you have a suped-up sports car, a thief magnet, or one that’s more expensive to repair than other cars? If so, it’s a safe bet that you’re paying more than the average car owner for insurance.
To get detailed information on your vehicle, contact the Insurance Institute for Highway Safety and request the ‘Highway Loss Data Chart:’
Insurance Institute for Highway Safety
1005 North Glebe Rd.
Arlington, VA 22201
Choose a Higher Deductible – The deductible is the amount you pay on a claim before insurance kicks in to cover the remainder. If, for example, you have a $250 deductible and are involved in an accident in which your vehicle sustains $1,000 in damage, you would be responsible for the first $250 and the insurer would cover the remaining $750. Generally speaking, the lower the deductible you choose, the more you pay in remiums. So if you’re a safe driver and rarely get into accidents, it may be a good idea to raise your deductible and pay less for insurance each year.
Avoid Unnecessary Coverage – If you have an older car that’s not worth very much, there’s not a lot of point in having collision and comprehensive insurance for it. There’s just not much there to protect. Between the deductible and the extra expenses of these coverages, the cost is likely greater than any possible benefit in the long-run.
Discounts, Discounts, Discounts – Most insurance companies offer a wide range of discounts for all sorts of things:
- Vehicles with automatic seatbelts
- Air bags
- Anti-lock brakes
- Security alarms, etc...
Good students are almost always eligible for some form of discount, which is especially valuable if you have a teenager who will be on your policy. Talk to your agent about how to take advantage of all the discounts that are available to you.
Get Educated! – Insurance companies may offer significant discounts to individuals who have recently completed defensive driving courses.
Geographical Location – If you’re planning to move soon, you should find out about your destination’s insurance rates. In general, the more urban the area, the higher the cost of insurance. Additionally, rates can vary greatly from one state to the next. Drivers living in California, New York, or Hawaii typically pay several times more than people in North Dakota, Idaho or Wyoming.
Credit Rating – Believe it or not, even your credit score has an impact on your auto insurance premiums. If you have a good credit record, you may be eligible for substantial discounts on your car insurance. Talk to your agent to determine whether your carrier uses credit score as a factor, and if you are eligible for savings.