Six Simple Strategies to Reduce Your Automobile Insurance Premium
There are many necessary expenses that we have to pay for every month like mortgage or rent payments, credit cards, and utility bills. But saving money is also important for all of us. There are many ways to cut down on your bills but the often overlooked expense is our automobile expense. You may not be able to shorten the distance you travel every day or buy-a fuel efficient car overnight. But, you can cut down your auto insurance costs by hundreds of dollars each year.
Here are 6 strategies to help you lower your auto insurance and reduce the burden on your wallet.
1. Reduce Risk
The less risky you are the lower will be your insurance premium.
- The best thing you can do to lower your insurance is to avoid accidents and drive more carefully as safe drivers are rewarded with a better insurance premium. It will save you 5% or more. Most insurers will reduce your premium even more if you do not have a traffic violation for three years. However, if you had traffic violations in the past you can still lower your payments by staying clean. In many states, traffic violations are dropped off your record after three years.
- Driving a car that is less likely to be stolen and has security features can be less expensive to insure. So if you keep your car in a garage overnight, or have an approved vehicle mobilizer, airbags, anti-lock brakes, and anti-theft engine cut-off systems you can qualify for discounts on your auto insurance premiums.
- If you are buying a new car, do not choose a fast one as it is an easy way of paying more premium. You could select a more average model in a lower insurance category to help keep the costs down.
2. Do Not Pay For Your Auto Insurance Every Month
Paying for your auto insurance monthly may be more convenient, but you will end up paying more with the add-on fees and interest. You should opt for paying your premium every six months or annually instead and also go for auto-billing to save even more. If you are anxious about the large bill then you can divide the premium by 12 and deposit that amount into your savings account every month.
You should also keep an eye out for extras that you may not need or have already covered elsewhere like roadside assistance and car rental coverage. For example, some banks offer breakdown recovery. Also, it might be cheaper to buy any additions separately.
3. Maintain a Good Credit Rating
Most insurers nowadays take into account your credit history to determine the cost of your auto insurance premium. According to a research by the Insurance Information Institute (III), “People who effectively manage their credit are less likely to file claims.”
To ensure that you get the best deal possible, do your utmost to keep your credit rating high by paying all your bills on time, reducing the overall amount you owe, and contesting any credit reporting errors that you find on your reports.
4. Opt for a Higher Deductible
Reduce your auto insurance premium substantially by opting to pay a higher deductible. A deductible is the amount of money you have to pay out of pocket before your insurance policy comes up with the cash.
Different auto insurance companies have different methods to calculate premiums and deductibles. However, you can lower your comprehensive and collision coverage by 15%-30% percent by just raising your deductible from $200 to $500. But, before talking to your insurance provider you should decide how much you can afford to set aside in savings and adjust your deductible accordingly.
5. Get Multi-Vehicle and Multiple-Policy Discounts
Many insurance companies provide incentives when you insure two or more vehicles under the same policy. So, if you have more than one car in your household you can bundle them together under one policy to take advantage of multi-vehicle discounts.
If you have multiple insurance policies then you can bundle them together with the same carrier to qualify for a multi-policy discount. For example, you can bundle your homeowners’ insurance with your auto insurance. This will also simplify your finances as it is easier to work with one insurance carrier than two or more carriers.
6. Do A Defensive Driving Course
Defensive driving has many extra benefits. Many auto insurance companies offer discounts for drivers who complete a defensive driving course at an accredited institution. Usually, these courses are taken by seniors or teenagers, but other drivers too can benefit from taking this course. Call your insurance company or check online to learn more as defensive driving course benefits vary from state to state.
Final Word
There are many strategies out there that can help you reduce your auto insurance and save hundreds of dollars every year. However, before making any potentially costly decisions you should take into consideration your circumstances and choose what works for you the best.
Contact Us to start a fast, free auto insurance quote and get the coverage that is right for you.
