How to Save Money on Car Insurance

Car insurance is possibly one of the largest bills you have to pay, after housing, food, and the paying for the car itself. What you pay for car insurance is determined by many things, and thankfully most of them are within your control. There are the usual suspects, such as the type of car you drive. Teams of actuaries at the insurance providers have determined that your Porsche 997 turbo should be much more expensive to insure than your wife’s 2004 Corolla, and both will cost more if you live in New York City, than if you live in Billings.
So, short of moving and trading in your prized sports car in for a family econo-box, what can you do to save money on car insurance? There are some things that go for almost any kind of insurance, be it car, home, boat or anything else. Then there are some savings tips that are more specific to car insurance.
General ways to same money on car insurance –Keep your deductibles as high as you can stomach. After all you’re not going to turn in a claim unless it’s probably over $1,000 anyway, so keep your deductibles for your different coverages at $1,000 or higher if you have a policy that allows it. If not, well, see section 2. You’re not going to turn in a claim for less than $1,000 because that is another strategy for saving money on car insurance; don’t use it unless you absolutely have to. It’s pretty common knowledge that most insurance companies use a claim as an excuse to raise your rates, so don’t make one.
Way to Save Money on Your Car Insurance -1Review your coverage to make sure you’re not paying for anything you shouldn’t be. I’ve seen people pay premiums for months on cars they had already sold, for example. Then evaluate the level of coverage you have in each area. Some may be lowered or eliminated entirely. For example, do you really need collision insurance on that ’85 Dodge Colt? Probably not. It will end up costing you more for the insurance than the car’s worth, so if it gets hit in the parking lot (or you hit something), the loss will probably exceed the value of the car. The company will declare it a total loss (where the term “totaled” originates). You’ll collect a check for the retail value of the car, in most cases. Since, on the car in question, that’s about $900, you can see how paying $45 a month for collision insurance would be a bad deal.
Way to Save Money on Your Car Insurance -2There are some other things that insurance companies look at to determine how much you’ll pay for their services, fair or not. One such item is your credit score. The insurance providers have determined that there is a link between your credit rating and the risk you present as one of their insured. As such, as your credit score falls, the price of your car insurance rises. So, not only will you save money on a mortgage, auto loan and credit card by keeping your credit score high, you’ll save on your car insurance as well.
Way to Save Money on Your Car Insurance -3Bundle your insurances together and you’ll likely get a muti-policy discount. If you have your homeowners, auto, life and business insurance with the same provider, they typically reward you with a bit of savings on all your policies. The exact amount you’ll save is influenced by too many factors to count. You’ll also save money if you insure more than one car with the same provider. I’m not advocating you rush down to Bill’s Bargains on Wheels and drive off in another car so you can save money on insurance, but if you have multiple vehicles in your family, insure them all at the same place.
Way to Save Money on Your Car Insurance -4There are many lifestyle choices you can make that will impact your insurance. Weather you buy your home or rent, married or single, your highest level of education, your job (or lack thereof) and if you have kids can all influence how much you’ll have to pay for car insurance. Some companies offer discounts for how you pay as well. If you have your payment automatically deducted every year, you’ll pay less than if you send a check every month, for example.
Way to Save Money on Your Car Insurance -5Get your discounts. All should, but many people don’t. Get their insurance discounts, that is. It’s possible that you could qualify for one or more discounts and not even know it. Discounts are offered for many different reasons. There are policy discounts for professional association memberships, senior citizens, multi-car (as mentioned above), club membership discounts (car clubs, travel clubs, AAA, and other clubs will offer discounts as benefits to their members).
Way to Save Money on Your Insurance -6Properly equip your vehicle and you can earn lower insurance rates as well. Get the important safety features, such as extra air bags, stability control, amiable headlights, etc. and some companies will reward you for your interest in safety by giving you a cheaper rate on your insurance.