Most people complain about the cost of their auto
insurance--hardly surprising, given that a typical policy costs
at least several hundred dollars a year. Depending on your age,
driving record, and other factors, your annual premium can be
significantly more than that. So how can you lower your premium
and save yourself money?
If you own a car and drive it, going without insurance is
generally not an option. In most states, you are required by law
to purchase a minimum amount of liability coverage. And you
should probably have more than just the bare minimum if you want
to provide yourself with adequate protection. There are steps
you can take, however, to reduce your auto insurance costs
without having to cancel your policy. Some or all of these steps
may 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 to
shop around. A particularly good time to investigate your
alternatives is when your current policy is about to be up for
renewal, especially if you find that your premium has gone up.
You may be surprised to learn that auto insurance premiums for
the exact same coverage on the same car can vary widely (by
hundreds of dollars) between different insurers, even in states
that regulate auto insurance rates.
2.
Increase your deductible. For many people, raising
the deductible on their auto insurance is a
good way to cut the cost of the policy. Sometimes you can reduce
your annual premium by 10 percent or more if you increase your
deductible from, say, $250 to $500. If you do this, however,
make sure you have the financial resources to handle the larger
deductible when the time comes.
3.
Keep an eye on your credit report. Your credit
history is an important factor for most auto insurance
companies. Many studies have shown a correlation between your
credit history and the risk to an insurance company. Paying your
bills on time and maintaining a good credit history will allow
you to enjoy lower auto insurance rates.
4.
Drive less. If you drive less than a certain number
of miles in a year (e.g., 7,500), you may qualify for a
low-mileage discount. If your insurer offers this discount, try
to limit your driving as much as possible. If you commute to
work, use public transportation instead of driving. When you go
away on vacation, fly or take the train.
5.
Don't use your car for business purposes. Since
work-related driving generally subjects you to higher premiums
than pleasure driving, it may be in your best interest to stop
using your car for business purposes.
6.
Drive more safely. You may be eligible for a price
break on your policy if you maintain a clean driving record for
a specified period (usually three years). A clean driving record
generally means no accidents, moving violations, drunk driving
convictions, etc., during that period. The best way to qualify
for the applicable discount is to drive carefully and
defensively at all times.
7.
Buy a low-profile car. Cars are rated on a risk
scale for auto insurance purposes. In general, sports cars and
other high-performance, flashy vehicles are classified as higher
risks because they are common targets for thieves and vandals,
and because statistically, the people who own them tend to drive
more recklessly. If you own such a vehicle, you will likely pay
a higher premium than if you owned a station wagon, sedan, or
other low-risk vehicle.
8.
Move. If you live in a rural community with little
crime and traffic congestion, your premium will generally be
lower than if you live in an urban area where your car is more
likely to be stolen, vandalized, or involved in an accident.
Granted, you shouldn't move just to cut your auto insurance
costs. However, this may be one of many factors in your decision
if you're thinking about relocating from the country to the
city.
9.
Keep your car in a garage. Cars parked in garages
are less likely to be stolen, vandalized, or struck by other
vehicles. Using a garage to store your car may entitle you to a
slight premium reduction.
10.
Have safety/anti-theft devices installed. CYou may
receive discounts on your insurance if your car is equipped with
one or more of the following options: anti-lock brakes,
automatic seat belts, and airbags. Similarly, anti-theft devices
such as car alarms and tracking systems (e.g., Lojack) may also
get you a discount because they reduce the chances of your car
being stolen or vandalized.
11.
Inquire about multifamily/multipolicy discounts.
You may receive a discount from your insurance company if you
buy more than one type of insurance through that same company
(e.g., auto and homeowner's). A discount may also apply to your
auto insurance if you insure multiple cars under the same policy
or with the same company.
12.
Other discounts Other discounts may be available if
you meet certain criteria. Examples may include discounts for
taking a defensive driving course, being a AAA member or staying
with the same auto insurance company for a number of years.
These discounts vary by company.
Please note that this description/explanation is intended only
as a guideline.
For more information about auto insurance
please go to:
www.Insurance.com
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