Saving Money On Car Insurance

by Don Elliott on August 23, 2011

Saving money on your car insurance is easier than you might think. Paying a lower monthly premium is not necessarily the goal. The key is having the right coverage for your own situation. The minimum auto insurance coverage required in most states is not adequate for many of us.

The auto insurance industry has gotten very sophisticated in the way that it calculates the risk associated with each driver’s personal history. Car insurance companies vary in the type of business that they prefer and price accordingly. Safe drivers with little or no claims will obviously be able to get the lowest premiums. However, the competitiveness of the insurers affects the extent of how low the premium is rated.

Variables that go into the auto insurance premium calculation include how far you drive every day, where you live, the make and model of your car, your used car value, your driving record, your age, and other personal traits. Most of these are beyond your ability to control for auto insurance purposes. However, there are some things that you can control.

Shop Around – Comparing auto insurance rates is fairly easy with the use of the computer. Many companies offer to compare rates for you. However, these companies only list a few auto insurance companies. Without further research, you may miss other available auto insurance companies with cheaper rates or different coverage. Your insurance agent is an excellent resource because he may represent several companies. He can look at your overall car insurance needs and offer discounts.

Primary Drivers – Look closely at who drives the cars covered under your car insurance policy. Teenage drivers listed as the primary driver on more expensive cars will cost you more on auto insurance. Car insurance companies consider your driving record, car make, and age to estimate your rate.

Discounts – Ask your auto insurance company for all available discounts. Car insurance companies have come up with a long list of discount offerings that might apply to you. Non-smoker, non-drinker, good student, training driver, good driving record, packaged policies, and multi-car discounts are all available.

Deductibles – As your cars get older, look at your collision and comprehensible coverage deductibles. Raising the deductible is a quick way to lower your payments, IF you can afford to pay the higher deductible amounts. Weigh the used car value against the higher deductible. Older cars may not warrant collision coverage.

Drive Safely – This is an obvious tactic, but still worth mentioning. Speeding tickets, DUIs, minor accidents, texting while driving, and a mechanically unsafe car will ultimately cost you more on your auto insurance. Be cautious about lending your car to other drivers. Accidents they have in your car count against your car insurance liability.

Car Choice – When shopping for your next new or used car, consider the cost of auto insurance as part of the buying process. Insurance rates vary considerably between different makes and models. Some security features like car alarms, GPS software, and other accessories will reduce the car insurance cost.

Credit Scores – Data shows that drivers with higher credit scores are a lower insurance risk. It doesn’t sound fair, but the auto insurance industry depends on statistics. Check your credit score periodically to make sure it is correct.

Shop Again! – It pays to recheck your car insurance premiums on a regular basis. Checking each year is not considered too often. Things change rapidly in the auto insurance business. This provides the potential for savings, even if your personal situation remains unchanged.

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