Lowering car insurance costs is a great way to save money. Sometimes a quick phone call is all it takes. Here are 6 ways to save money on car insurance.
What follows is a list of tips for reducing your premiums and saving a ton of money.
Keep your driving record clean
Your driving record can play a pretty big role in the premiums that you’ll pay for insurance coverage, whether shopping around for a new policy or just retaining the one you’ve had all along.
In other words, don’t get nailed for speeding like I did a few months back. I was fortunate in that it was a first offense. This meant that I was able to keep my record clean by pleading nolo contendre (no contest) and paying the fine.
However, next time I won’t be so lucky, as I’ll wind up with points on my license and higher insurance premiums. Get enough of these tickets (or a particularly bad one, like reckless driving), and your insurance company could even drop you!
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Increase your deductible
Your deductible is the amount of cash you’re expected to pony up if a claim is made on your own insurance policy (if there isn’t someone else whose insurance is responsible for the damage). You’ll be given a handful of options for setting the level of this when you sign up for or renew your policy.
Well, if you’re willing to bear a greater portion of the risk — in the form of a higher deductible — you can save a significant amount of money on your premiums.
Simply call your agent and ask them to increase your financial responsibility. This will likely lower your premiums a noticeable amount; the higher the deductible, the lower your monthly premium expense.
One word of warning, though: just be sure that you have enough cash on hand to cover your out-of-pocket expenses in the event of an accident. It’s not worth the monthly savings if you can’t afford that new $2,000 deductible when you get in a wreck.
So, be sure to balance the savings with what you can actually afford at a moment’s notice.
Drop unnecessary coverage
If you’re driving an older car, you might want to consider dropping your comprehensive and/or collision coverage entirely. After all, what’s the sense in paying a ton of money to insure against damage to a car that might not be worth repairing?
Note that I’m not suggesting that you drop your insurance coverage entirely, just the portion that pays for repairs on your own car. Liability insurance is still required by law, at the very least.
Bundle multiple policy types together
I can’t speak for all insurance companies, but we get a nice “multi-line” discount through USAA for carrying multiple policies with a single company.
We actually have two car policies, our homeowner’s policy, a personal articles policy (for my wife’s engagement and wedding rings), and an umbrella policy… all with the same company. In the end, it’s much cheaper than buying the same coverage through multiple different companies.
Ask about other discounts
You might qualify for discounts for being accident-free, renewing your policy, driving relatively few miles each year, taking a defensive driving course, etc. Be sure to talk to your agent and get what you have coming to you.
Assuming that you’re doing everything else right, another great way to save money on car insurance is to comparison shop. You can either call around to local agents or use an insurance comparison tool. Here are four of our favorites companies:
Whatever you do, be sure to buy from a reputable company so you won’t run into any problems if/when you file a claim.
Resource: Reducing Your Automotive Expenses
So there you have it. These simple tips for saving money on car insurance can help you trim quite a bit off of that monthly payment.
Keep your driving record clean and only keep as much coverage as you feel you really need. Be sure to compare policies and ask about discounts regularly, too — insurance products change frequently, and you could be missing out on savings if you aren’t proactive!
If you have any further suggestions, please be sure share them in the comments.