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10+ Tips to Help You Save on Car Insurance
Most people complain about the cost of their autoinsurance--hardly surprising, given that a typical policy costsat least several hundred dollars a year. Depending on your age,driving record, and other factors, your annual premium can besignificantly more than that. So how can you lower your premiumand save yourself money? If you own a car and drive it, going without insurance isgenerally not an option. In most states, you are required by lawto purchase a minimum amount of liability coverage. And youshould probably have more than just the bare minimum if you wantto provide yourself with adequate protection. There are stepsyou can take, however, to reduce your auto insurance costswithout having to cancel your policy. Some or all of these stepsmay be appropriate for you, depending on your circumstances. Specific ways to save money on auto insurance: 1. Shop around. One of your first steps should be toshop around. A particularly good time to investigate youralternatives is when your current policy is about to be up forrenewal, especially if you find that your premium has gone up.You may be surprised to learn that auto insurance premiums forthe exact same coverage on the same car can vary widely (byhundreds of dollars) between different insurers, even in statesthat regulate auto insurance rates. 2. Increase your deductible. For many people, raisingthe deductible on their auto insurance is agood way to cut the cost of the policy. Sometimes you can reduceyour annual premium by 10 percent or more if you increase yourdeductible from, say, $250 to $500. If you do this, however,make sure you have the financial resources to handle the largerdeductible when the time comes.3. Keep an eye on your credit report. Your credithistory is an important factor for most auto insurancecompanies. Many studies have shown a correlation between yourcredit history and the risk to an insurance company. Paying yourbills on time and maintaining a good credit history will allowyou to enjoy lower auto insurance rates. 4. Drive less. If you drive less than a certain numberof miles in a year (e.g., 7,500), you may qualify for alow-mileage discount. If your insurer offers this discount, tryto limit your driving as much as possible. If you commute towork, use public transportation instead of driving. When you goaway on vacation, fly or take the train. 5. Don't use your car for business purposes. Sincework-related driving generally subjects you to higher premiumsthan pleasure driving, it may be in your best interest to stopusing your car for business purposes.6. Drive more safely. You may be eligible for a pricebreak on your policy if you maintain a clean driving record fora specified period (usually three years). A clean driving recordgenerally means no accidents, moving violations, drunk drivingconvictions, etc., during that period. The best way to qualifyfor the applicable discount is to drive carefully anddefensively at all times.7. Buy a low-profile car. Cars are rated on a riskscale for auto insurance purposes. In general, sports cars andother high-performance, flashy vehicles are classified as higherrisks because they are common targets for thieves and vandals,and because statistically, the people who own them tend to drivemore recklessly. If you own such a vehicle, you will likely paya higher premium than if you owned a station wagon, sedan, orother low-risk vehicle.8. Move. If you live in a rural community with littlecrime and traffic congestion, your premium will generally belower than if you live in an urban area where your car is morelikely to be stolen, vandalized, or involved in an accident.Granted, you shouldn't move just to cut your auto insurancecosts. However, this may be one of many factors in your decisionif you're thinking about relocating from the country to thecity. 9. Keep your car in a garage. Cars parked in garagesare less likely to be stolen, vandalized, or struck by othervehicles. Using a garage to store your car may entitle you to aslight premium reduction.10. Have safety/anti-theft devices installed. CYou mayreceive discounts on your insurance if your car is equipped withone or more of the following options: anti-lock brakes,automatic seat belts, and airbags. Similarly, anti-theft devicessuch as car alarms and tracking systems (e.g., Lojack) may alsoget you a discount because they reduce the chances of your carbeing stolen or vandalized.11. Inquire about multifamily/multipolicy discounts. You may receive a discount from your insurance company if youbuy more than one type of insurance through that same company(e.g., auto and homeowner's). A discount may also apply to yourauto insurance if you insure multiple cars under the same policyor with the same company. 12. Other discounts Other discounts may be available ifyou meet certain criteria. Examples may include discounts fortaking a defensive driving course, being a AAA member or stayingwith the same auto insurance company for a number of years.These discounts vary by company.Please note that this description/explanation is intended onlyas a guideline. For more information about auto insuranceplease go to: Insurance.com
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