When shopping for car insurance, one of the first questions that come up is: how much will this cost? Although it makes sense to worry about the cost of insurance, it’s important to know about the legitimate ways of lowering costs are, versus ways that will end up costing you more (of a headache) in the long run.
Advertisers often try to trick consumers by promising a simple way of reducing the price one pays for car insurance. The truth is that there really isn’t just one way of lowering your premium. To get the best rates possible, you’ll want to follow these suggestions.
Tip No 1: Keep your record clean
The first and most significant tip may seem obvious, but by far the biggest way of keeping your insurance low is by not getting into accidents or getting traffic related tickets. Every instance reported to your car insurance will increase your premiums. Subsequent violations will increase the cost exponentially, and even no fault accidents can result in increased premiums! Fortunately, there is a statute of limitations on how long these violations will count against your driving record, so it’s important to be aware of any violations and when they’ll drop off your policy.
Tip No 2: Shop around
Many of us become complacent with our current insurance carrier and forget that rates may have changed, or there may be new players on the block. We’ve all seen Flo the Progressive gal and the GEICO Gecko promising lower rates, but sometimes other major insurance carriers offer better deals, especially if auto policies are combined with home policies. So, if you’re looking to save a buck, give a couple of insurance companies a call and see what they can offer you.
Tip No 3: Combine your insurance policies
The easiest way to reduce the cost of your car insurance is to combine policies. For instance, all insurance companies offer multi car discounts. If your household has two or more cars, you can significantly reduce your insurance bill by having all of your cars under the same policy. You can also bundle different insurance products if your insurance company offers them. This means that any additional insurance product, such as home insurance or possibly even life insurance can reduce your insurance bill. When choosing a car insurance company, make sure to find out whether your insurance company offers competitive rates for other types of policies and whether they offer bundled discounts.
Tip No 4: Ask about “hidden” bonuses
Most insurance companies offer discounts for a variety of reasons. For instance, if you have a good GPA in school, if you’re a safe driver, or if you drive short distances. If you’re a professional, your premium might qualify for a discount. In addition, companies offer discounts for lump sum payments or monthly payments which can be pretty substantial. Since it’s not in their best interest to proactively apply discounts to your policy, you’ll have to ask about them. Give your insurance agent a call and see if you qualify for any new discounts as you may be surprised.
Tip No 5: Sometimes, lower doesn’t mean better
Although it may be tempting to switch to a cut-rate insurance company to lower your bill, be careful not to pick a second rate insurance carrier. Remember that insurance companies are in the business of making money – and the easiest way is by not paying out claims. Of course, there are certain regulations which force insurance companies to pay out on claims, but it’s much easier to deal with a large and well-known insurance company than one you only hear about through online advertisements or late night TV.
In addition to being careful about using cut rate insurance companies, you should also be aware that by switching insurance companies you’ll lose your loyalty discount. This means that if you’re insured with a company for 5 or 10 years and you have a low policy, you’ll lose that discount when you switch to another carried as well as all the other perks that that company offers in the loyalty program, (such as accident forgiveness or free towing).
In closing, there are several ways to save on your car insurance premiums. You may need to do some legwork to find them since they generally don’t just fall into your lap. The savings you get may make it worth the time you take.
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