Having adequate car insurance is both smart and prudent, but there’s no question that it adds to the expense of driving. The good news is that premiums can vary by hundreds of dollars depending on a number of factors. Review your coverage at renewal time to make sure your insurance is in step with your needs, and follow these practical steps to reduce the bottom line on your auto policy.
SHOP AROUND FOR YOUR CAR INSURANCE
Prices differ from company to company, so it pays to shop around.
Get at least three quotes, from both different insurance companies and different types of insurance companies—that is, those that sell through their own agents; those that sell through independent agents; and those that sell directly to consumers via the phone, an app or the Internet. Ask friends and relatives for their recommendations based on their experiences, and do your own due diligence by researching the company before committing.
Understand auto insurance enough that you can ask a prospective insurer informed questions. Anyone you speak to should take the time to answer to your satisfaction. Remember, these are the people you’ll rely on if the worst happens and you need to make a claim.
Keep in mind that the lowest price isn’t always the “cheapest” option. Make sure the company you choose is reputable and that you’re comfortable with the service you get from the insurance professionals you speak to. Your state insurance department or online consumer information sites may provide information on consumer complaints by company to help you choose the right insurance company for your needs.
COMPARE INSURANCE COSTS BEFORE YOU BUY A CAR
Auto insurance premiums are based in part on the car’s price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of car theft or personal injuries, or for cars that are known to be safe. When you’re comparing new or used vehicles to purchase, also research what each will cost to insure. To start, you can check safety rankings for specific models with the Insurance Institute for Highway Safety’s (IIHS) online Top Safety Pick ratings tool.
RAISE YOUR DEDUCTIBLE
By choosing a higher deductible on your car insurance, you can significantly lower your premium costs. Be sure you have enough money set aside to pay the higher deductible in the event you have a claim.
MAINTAIN A GOOD CREDIT HISTORY
Establishing a solid credit history has many benefits, including lower insurance costs. Many insurers use credit information to price auto insurance policies. (Research shows that people who effectively manage their credit make fewer claims). To be sure you’re getting the good credit you deserve, it’s a good idea to check your credit record on a regular basis to be sure all information is accurate.
TAKE ADVANTAGE OF LOW MILEAGE DISCOUNTS
Some companies offer discounts to motorists who drive less than the average number of miles per year. Low mileage discounts can also apply to drivers who carpool to work.
ASK ABOUT GROUP INSURANCE
Some companies offer reductions to drivers who get insurance through a group plan from their employers. Or through professional, business and alumni groups or from other associations. Check with your affiliated organizations to see what they offer.