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If you own a car, auto insurance is a necessary monthly expense. But it doesn't have to "break the bank". There are many things that you can do to make sure that you aren't over paying for your car insurance. Here are a couple of tips to keep in mind the next time you shop for auto insurance.
Strategy #1: Know All Available Discounts and Use Them
Most car insurance companies have a variety of discounts they can offer you to keep your premiums lower. Below is a list of some of the discounts that may be available to you. If you qualify for any of these, make sure that they are put on your policy.
- Home-Auto Discount
- Claim-free Discount
- Good Student Discount
- Excellent Credit Discount
- Distant Student Discount
- Home Owner Discount
- Multi-car Discount
- Years License Discount
- Marriage Discount
- High Previous Limits Discount
- Advanced Purchase Discount
- Defensive Driving Course Discount
- Higher Education Discount
- Retired Discount
Strategy #2: Raise Your Collision Deductible
This strategy is only recommended for careful and experienced drivers who rarely if ever get into at-fault accidents. Remember, your Collision deductible only applies to fix your personal automobile if you are at-fault in an accident. If you are a very careful driver, you can save money on your insurance by raising your Collision deductible to $1,000. If you don't get into an at-fault accident for several years, the money you have saved on the premiums could make up for the additional cost of the deductible if you do cause an accident. Before you attempt this strategy, however, make sure you have the financial capability of paying out the $1,000 deductible if you do get in an accident.
Strategy #3: Don't Call Your Insurance Company to Report an Accident Unless You Have To
You might not be aware that even not-at-fault accidents and $0 payout claims can significantly affect your insurance premiums. I have seen rates go up by more than 30% just because someone had a not-at-fault, $0 claim on their record. When you call your insurance company to report an accident, it goes on your record as a claim even if it was not your fault. If at all possible, try to settle a claim where it is clear the other driver is at-fault without involving your insurance company. Many times this is not possible, but try to keep your insurance out of the picture to avoid $0 pay out claims on your policy. Likewise, if a claim is less than your deductible, you are better off just paying the claim out of your pocket since it will cost you the same amount anyway.
Strategy #4: Drive Older Vehicles, or Less Expensive Vehicles
The newer and more expensive the car, the higher the insurance premiums will be. The hot sports car is fun to drive, but you can pay dearly in insurance. To lower your car insurance premiums, drive a car that is older or less expensive.
You can combine this method with Strategy #2 for double savings! If you raise your deductible on an older car, it might be higher than the cost to replace the car. Since collision coverage only pays to repair your personal car, if the deductible covers the full value of the car you will not receive any benefit. Dropping collision coverage all together on older cars will save you even more on auto insurance.
Strategy #5: Avoid Tickets and Accidents at All Costs
Tickets and accidents do serious damage to your insurance premiums. Note that even if you get a ticket or into an accident in a different state than your license, it will still show up on your driving record. Tickets and accidents follow the drivers license numbers, and thus will always be pulled up on your driving record, regardless whose car you were driving and where you it was received. Avoid tickets and accidents at all costs, because nothing raises premiums more quickly than a few tickets and accidents.
Strategy #6: Fill Out an Online Quote, and Allow Agents to Compete for Your Business
This is usually by far the best strategy to finding the cheapest auto insurance rates. This site was created for two reasons as a service to you: (1) help people better understand what their policy covers, and (2) allow them to shop their coverage with a variety of the top carriers in the nation to find the least expensive auto insurance policy. Up until this point, we have taught you the most important aspects of car insurance. Now is your chance to capitalize on this information and comparative shop your insurance premiums and see how much you can save on auto insurance. Click here to shop your auto insurance and save!