Getting car insurance can be a frustrating (and expensive) process. Once a driver has it, the natural reaction is to stop looking for the best bargain or not try to get it reduced. It’s human nature and it could be costing you a bunch of money.
Insurance, like many things, has a variable cost that your actions – or inactions – could make either more, or less, expensive. Maintaining a safe driving record will lower the costs over time, getting tickets will raise it. Having a 4-door sedan and a family will lower the costs while being single and driving a flashy sports car will raise it.
Many of these factors are common sense, but the point is that people become complacent once they have satisfactory insurance and don’t manage it like they could.
1) Increase your deductible
You can modify how much of a deductible your insurance has. The higher the deductible, the less money out of your pocket it will cost until you have an accident. If everyone on your insurance has a safe driving record, this could be a way to lower your insurance payments.
That decision, however, can be a double-edged sword in the event of an accident. With a higher deductible, you are responsible for paying the difference out of your own pocket. The decision needs to be based on driving records as well as on what you can afford.
2) Don’t over insure
There is an enormous difference on the insurance you need on a brand-new car that you are still financing and a ten-year old beater that is paid for. Comprehensive insurance is necessary for a car that still has a lien on it, it makes sure that the car is repaired or paid for in the event of damage from collision or any other source. The biggest advantage to having comprehensive coverage is that you are not on the hook for the balance of the car’s financing if it is destroyed.
Having to keep paying for something after it is gone is disheartening, to say the least. Comprehensive insurance covers that. Cars that have already been paid off, however, have usually depreciated to the point where the cost of comprehensive insurance quickly overtakes the cost of replacing the car.
3) Combine policies
Buying your car insurance through the same company where you get homeowners or renters insurance can give you a solid discount on all your policies. The insurance industry refers to this as multilining, and it can combine discounts from different policies and save you money.
Multilining is the insurance industry’s form of risk management. Since you are more likely to get into an accident in your car than you are to have a disaster with your home or apartment, insurance companies can balance the risk of your auto insurance with the lesser risk of homeowner’s or renter’s insurance.
4) Watch your credit rating
Although it varies from state to state, many insurance companies use your credit rating to determine your insurance score. This insurance score determines how much your insurance costs you. Paying your bills and improving your credit rating may make you eligible for a discount on your insurance rate.
Comparing car insurance companies and monitoring your driving habits and credit rating might seem like quite a bit of effort, but lowering your premiums puts more money in your pocket. The more money you have in your pocket, the more likely you are to pay your bills on time and keep your credit rating in good standing. A modicum of ongoing work will keep your bills under control and your insurance reasonable.