Car insurance is an expense that no driver can afford to live without. If you drive uninsured, you are driving illegally. You can, however, save money on your car insurance if you shop carefully.
1. Up the Deductible and the Maximum Coverage
You can save money on your car insurance by increasing your deductible or lowering your maximum coverage. Increasing your deductible makes sense, because in a crunch most people can come up with $500. Lowering your maximum coverage is dangerous, however. If you are in a car accident and someone sues you for $500,000 and your liability coverage is only $50,000, will you be able to come up with the extra $450,000? Probably not. Keep your deductible high but the maximum coverage high as well.
2. Consider an Umbrella Policy
You can purchase an umbrella policy that covers your home, its contents, and your car. This can take the place of comprehensive coverage on your car. These policies save quite a bit per year when compared to buying these financial products separately.
3. Protect Your Credit Score
Believe it or not, your credit score has an impact on the cost of your car insurance. Work hard to keep your credit score high. If you have errors on your credit report, correct them before you shop for car insurance.
4. Shop Around
This goes without saying, but unfortunately many consumers do not shop with different insurance providers. The cost of car insurance varies significantly from provider to provider, so take some time to shop around. Use the Internet to help you comparison shop conveniently.
5. Compare Apples to Apples
When you get quotes from various insurance providers, make sure you are comparing the same things. Get specific quotes for the amount of coverage, deductible amount, and type of coverage you are purchasing. This will help you find the cheapest option.
6. Learn About Discounts
Car insurance providers offer many, many discounts to those who know how to take advantage of them. For instance, you can lower your rate on a car you rarely drive with a "low mileage" discount. Other common discounts include discounts for good drivers, discounts for teen drivers with good grades, multi-car discounts, discounts for the car's safety features, and discounts for anti-theft devices on the vehicle.
7. Consider Dropping Collision
If you are driving an older vehicle, you may be paying more for the collision coverage than the car is worth. If you are in a collision, your insurance provider is only going to give you what the car is worth, not the total replacement cost. You may be better off putting the premium money into a savings account to pay for a new car than continuing to insure it.
8. Learn How to File a Claim
Before you purchase the insurance, make sure you know how the company handles the claims process. This will help you know whether or not the insurance is a good value for the money. Make sure you get your choice of repair services if you should need them.
9. Combine Policies
If you have more than one insurance policy that you can combine into one premium, do so. For instance, if your teen has insurance on his vehicle, and you also have insurance on yours, combine the two. You will both save money. You can also save money by purchasing multiple insurance products from the same insurance provider.
10. Compare Insurance Costs Before Buying a Car
If you are in the market for a new vehicle, compare the cost of auto insurance on the vehicles you are considering before you buy. Two cars that seem very similar to you will look very different to the insurance provider due to their safety records. You can save a lot of money by buying a car that has a lower insurance premium.
