Besides all of the maintenance our cars require and the gas that they guzzle down, we’ve also got to carry another big expense: car insurance. Even though this is a mandatory expense that everyone needs to deal with, it accounts for hundreds of dollars deducted from our annual income, so no one really welcomes it with open arms. It is worth it to “shop around” for the best deals out there even though you may get a lot of emails, calls and letters from agents after inquiring about quotes and services. Not all car insurance needs to be a draining expense though, and there are a lot of ways to reduce your car insurance costs…you just need to know where to cut back and what you can do to lower your rates!
Seek out discounts.
Many insurance companies reward you with discounts for being a safe driver, a new driver, alumni of a certain affiliated university, member of an organization or group, or even for being a “low-mileage” driver. When you request quotes, be sure to ask about these discounts and present the agent with your clean driving record, the university you graduated from, or even the amount of miles that you put on your car per month. If you’re part of a carpooling program, many insurance companies offer policyholders who carpool to work or drive a lower-than-average number of miles each year a significant discount. If you’re the parent of a teen driver who gets good grades in school, also mention this to your agent. Teens who maintain good grades and pass an approved drivers’ education course usually can qualify for reduced rates too.
Combine your policies with one company.
If you have other items to insure, like your house or your apartment, consider taking out those policies with the same company that you have your car insurance with. Many offer “bundle” or “combination” packages to policyholders who have multiple coverages with one company and will offer a pretty decent discounted price for both items.
Purchase a “low-profile” car.
We’ve all seen those reports that list the “Top 10 Cars Most Likely to Be Stolen” and sign when ours is near the tops of the list. Insurance companies sigh at this list too, and often have to hike up your rates when you are the owner of a car that is high on the theft list or is expensive to repair. The Insurance Institute for Highway Safety often has the reports listed on their website, so it might be a good idea to see if your car (or the one you want to buy) is considered high risk.
Only buy coverage you really need.
If your car is an older model or one with low market value, you might want to consider dropping expensive coverages like collision or comprehensive to save a few bucks overall. These coverages are often not worth it because any claim you make probably won’t exceed the cost of the insurance and the deductible amount, but be sure that it’s worth the risk by checking your car’s current value at Edmunds.com or Kelly Blue Book.
Request a higher deductible.
The deductible, or the amount of cash you have to hand over before the insurance company comes to the rescue, often determines the amount of premium that you have to pay. By bumping your deductible up a little, say from $200 to $500, you could lower the cost of your collision and comprehensive coverage by 15 to 30 percent. If you feel like you have the cash ready to put forth in the case of a repair, you may want to consider bumping up your deductible.
The most important thing to remember is to shop around for different quotes and be sure to ask for any and all discounts that may be available to you. Hopefully these tips help bring your car insurance costs down a bit!