Certain auto insurance rating factors are out of your control such as your age and gender, but the good news is that that there are critical rating factors within your control that can lower your auto insurance rates. Here are 8 tips to lower your auto insurance rates:
1. Consider raising your deductibles.
Higher deductibles will save big bucks on your auto insurance, but remember you will be responsible for covering the deductible if something happens to your car. Make sure you can come up with the higher deductible, because the premium savings will not be worth it if you can’t pay the deductible to get your car out of the body shop.
2. Consider dropping comprehensive and collision coverage or “full coverage.”
Collision coverage provides coverage for repairs to your car following an accident or the replacement cost of your car if it is totaled. Comprehensive coverage covers damage to your vehicle caused by something “other than collision” such as theft, vandalism, or hail. If you file an insurance claim, you will not collect more than your car is worth; therefore, if your car is old with a low market value, you may want to drop comp and collision coverage and carry liability coverage only, as the amount you will recover after filing a claim may not exceed the combined value of the higher premium and the deductible. Dropping comp and collision will reduce your insurance premium significantly, but this is a personal decision that only you can make. You cannot drop comp and collision coverage if you have a lender.
3. Buy a car that is cheaper to insure.
The year, make, and model of a vehicle does impact insurance rates. In 2011, the least expensive vehicle to insure was a minvan. If you are concerned that driving a minivan might hurt your image, you’ll be happy to know that trucks also tend to have lower insurance rates, because of their higher safety rating.
4. Consider cost of insurance before you move.
Obviously, this might not be possible if you get a job transfer or land a job that you need in a city that happens to have high insurance rates. Just be aware that each zip code has different insurance rates, depending on the number of claims and accidents in that particular zip code.
5. Bundle your insurance.
In most cases, it is always cheaper to have more than one line of insurance with one insurance carrier.
6. Maintain good credit.
Your credit is part of your insurance score, which is used to determine the rates that an insurance company charges you. There is a correlation between a good credit score and a good driving record. If you are responsible with your money and pay your bills in a timely manner, chances are you will drive responsibly and pay your insurance premium on time.
7. Maintain a good driving record.
Obviously, accidents, speeding tickets, and moving violations will cause your insurance rates to increase. Discuss the importance of safe driving with young drivers in your household before you put them on your auto policy.
8. Consider spying on your kids!
Yes, you read it right. It is possible to install devices in cars that monitor speed, braking distance, recklessness, and global positioning, and some insurance companies are giving discounts for installing these type of monitoring devices. If young drivers resent the invasion of privacy, have them call me for a quote on an individual auto policy. The increased rate should change their attitude!
Although price is important, remember that the objective of auto insurance is having the coverages you need in the event of an accident, theft, or damage.