An average car insurance costs $1510 a year as per a recent Forbes article. The cost of insurance varies widely between states. Average car insurance premium in Louisiana is $2699. In California average car insurance costs $1816. Wouldn’t it be great if you knew how to lower car insurance premium without compromising insurance cover. Let’s see how you can save on your car insurance.
Ways to Lower Car Insurance Cost
Your auto insurance cost depends on a number of factors like where you live, your driving history, how much you drive, your insurance company, the kind of car insurance cover etc. Here is a list of 14 things you that will help you to select a cheap car insurance.
Shop Around
The easiest way to lower car insurance cost is to shop around. Many Americans do not go beyond one quote, usually from an insurance advisor, when buying car insurance. Because prices vary from one company to another it makes sense to get at at least three quotes. We recommend five. Your consideration set should include large car insurance carriers like Allstate, Farmers, GEICO, Nationwide, Progressive, and Statefarm, as well as some good local players.
Cheapest Car Insurance May Not be the Best
Do not base your judgement on cost alone. Choose a company which has an excellent customer service track record. Ask your friends and relatives for advice. Go online and check the reputation of the insurance company on social media sites like Twitter, Facebook, and Google Plus. Read what people are saying about the company on consumer review sites like Yelp. Your state’s insurance department’s website will also have information on consumer complaints. Finally don’t forget to ask your insurance agent to help you choose the right company.
Ask for Discounts
The second easiest way to lower car insurance is to ask for discounts. Car insurance companies offer a host of discounts. Sometimes the insurance agent or the auto insurance carrier will not tell you all the discounts that are available. It is your responsibility to find out all the applicable ones. These are the discounts car insurance buyers should keep in mind.
- Good Driver – Depends on your driving history and absence of charges like DUI, overspeeding etc. Some companies offer a 5% discount every six months of safe driving upto a limit. This can lower car insurance considerably.
- Loyalty – Companies give you a discount for just being a long time customer. If you are one then ask for loyalty discount and try to get the maximum you can.
- Good Student – For students who qualify the GPA requirement.
- Anti Theft Gadgets and Anti Lock Brakes – If your car has anti theft gadgets and tracking device installed you get a discount. Ditto for anti lock brakes.
- Switchover – The discount you get for switching over to a new insurance company.
- Future effective, POI, and marriage are some other common discounts.
Remember it is up to you to grab all the applicable discounts. So don’t be hesitant to ask questions and request a list of all possible discounts.
Give Correct and Precise Answers
Before you buy auto insurance the website or insurance agent will ask questions on driving history, presence of medical conditions, family composition etc. Some buyers do not answer these questions correctly or give vague answers and end up paying higher premium. Just giving precise and correct answers to agent’s question can lower car insurance premium.
If you are buying insurance through an agent make sure you understand the question before answering. If you do not understand a question ask the agent to elaborate. A good strategy is to ask the agent to send you the questionnaire beforehand. This way you can go through it without a sense of hurry. Read each question carefully and note down the gist of your answers on a piece of paper. Refer to your notes when the agent visits. Take help from family and friends.
Let’s take an example of a precise answer. Let’s say you had a overspeeding ticket which has fallen off your record. When the agent asks you if you any overspeeding tickets the answer to this question will be a no. You should not say that you once had a speeding ticket.
Buy A Multiline Insurance
When you buy two or more types of insurance (for example car insurance and home insurance) from the same company it is called a multiline insurance. Combining your car insurance policy with your homeowners or renter’s insurance policy is a good way of getting discount. Most national carriers offer a multiline discount and it reduces auto insurance cost and the cost of the clubbed insurance policy. Buying a multiline can help lower car insurance premium by 10% to 20%.
Maintain A Good Credit Score
People with good credit rating have lower car insurance cost than people with bad credit score. If your credit score improves inform your insurance company. This way you next month’s car insurance premium will come down. If your insurance company is not lowering the premium in light of your improved credit score then it is time to find a new carrier.
Keep Window Shopping
Smart car insurance buyers pay lower car insurance by reviewing their insurance every once in a while. Car insurance depends on factors that can change with time. Factors like where you live, how much you drive, age of car, driving record, cars you drive, drivers you have on your policy can change.
If you do not shop around then you may not realize that you are paying more than you should. You car insurance cost can come down significantly when a overspeeding ticket falls off your record or when a teenage driver is no longer on the policy. Some insurance companies even consider factors like education level of the driver. Review your policy once a year.
Pay Yearly Installment
Insurance companies charge a convenience or installment fee for monthly installment. Shifting to a single yearly payment will help you save $50. This is not much but a good strategy to lower car insurance when every penny counts.
Deductible
Deductible is the amount of money you pay before the insurance kicks in. Increasing deductible for collision insurance can save some decent money. For example if you live in California, drive a Honda Accord, and have a clean driving record then increasing collision deductible from $100 to $2500 will save about $400 per year.
Rental Car Reimbursement
If you have more than one car then you probably don’t need this cover. Getting rid of rental car reimbursement will lower car insurance premium by about $100 per year.
Club Glass Insurance with Comprehensive
Auto glass is expensive and taking glass insurance as an add on cover is not a good idea. Club it with comprehensive insurance and you end up saving about 50 dollars.
Think of Lowering Car Insurance Cost Before You Buy A Car
Smart buyers lower their car insurance cost even before they buy a car. Auto insurance premium varies widely between similar car models. Cost of auto insurance has the following components which depends of the car:
- Price of the car
- Repair cost
- Overall safety record of the car (not your driving history but how safe the car generally is.)
- Likelihood of theft
- Smaller cars have higher insurance cost
Before you buy a car think how much it is going to cost you over the next 4-5 years. You don’t want to be holding a car with an obscene insurance premium.
Get on that Cycle
Remember that cycle you purchased but never rode? Get on that cycle. Not only will cycling keep you fit it will also lower your car insurance. Not to mention the gasoline bill. Carries charge more from those who drive more. You also pay more if you use your car for business like making a sales call.
Reduce Cover on Older Cars
Reduce cover on older car. If you are driving a car that is more than 7 years old then you should consider lowering comprehensive cover damage to around $1000. This will substantially lower car insurance cost over next three to four years.
Things to Keep In Mind When Hunting For Cheap Car Insurance
Exploring ways to lower car insurance premium is OK. All savvy buyers should try to reduce as much as possible. But don’t buy a cover that will land you in a soup in case of an accident or theft. Here are some things you should keep in mind when trying to save on your auto insurance.
- You cannot reduce drop collision and comprehensive cover on a leased or financed car.
- You may not be allowed to increase deductible on your leased car beyond a certain point.
- Don’t skip towing insurance if you are not a member of an auto club.
- Your car insurance should cover properly for any liability. Make sure your coverage is at least equal to the total value of your assets.
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Great advice! I really like your point on making it your responsibility to find the discounts for car insurance policies. There are a ton of great discounts available, too, such as the good student one. Because there are so many, it would be really laborious for an agent to verbally offer them to each potential client. Plus, I imagine that insurance agents can’t even access things like your student record.
I always like to see if I can save money on stuff like car insurance. I usually go by rate to see what is best, but maybe I should look into the discounts. I wonder if I can get one for being a good driver?
Thanks for the ideas you have provided here. In addition, I believe there are many factors which really keep your car insurance premium straight down. One is, to take into account buying automobiles that are inside the good directory of car insurance organizations. Cars which can be expensive are definitely more at risk of being lost. Aside from that insurance coverage is also based on the value of your car or truck, so the costlier it is, then the higher the premium you have to pay.