How to Save Money on Automobile Insurance

saving money on automobile insuranceEverybody loves saving money. Especially when it comes to things we have to have. If you drive an automobile, then you have to have car insurance too. Many people don’t realize they could be saving a lot of money compared to what they are currently paying for auto insurance. I’m going to show you how.

Tips for Saving Money

1. Shop Around

As with anything, price varies from insurer to insurer, even for similar policies. Many companies can provide quotes quickly over the phone or online, so it is easier than ever to get various quotes in a matter of hours. Price alone shouldn’t be the determining factor when choosing an insurer, ask around and read up on the different insurers. Insurance is bought for a piece of mind, and if the time comes when it is necessary to use it, you want an agent and agencies that will assist you in that stressful time.

2. Choose Higher Deductibles

A deductible is an amount that the policyholder pays when they get into a wreck or need to the insurance company to cover some other expenses. This is in addition to their regular premium. If you request higher deductibles, you will be responsible for more of the payment in the event of an accident, however, the insurance company will compensate for you taking on greater risk by offering a lower cost insurance premium. For example, choosing a $500 deductible over a $200 deductible can reduce coverage costs 15-30%.

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3. Reduce Coverage on Older Cars

As stated before, collision and comprehensive insurance can often be dropped on older cars. A rule of thumb is that if the car is worth less than 10 times the deductible, having this coverage is not cost beneficial.

4. Buy Insurance with Homeowners

Many insurers will give package discounts if you carry both policies with them. Also, many will offer discounts for having multiple vehicles covered with them. Although they may offer discounts, it is still important to shop around, as greater savings may be found elsewhere.

5. Maintain Good Credit Rating

As you now know, your credit rating is often a major factor in the rate the insurance company ultimately charges. Maintain good credit, and you will have lower rates.

6. Other Discounts

Beyond the above tips, insurers offer a wide variety of discounts for many different things. These other discounts vary greatly from insurer to insurer, so one is best served by asking about the below when shopping around:

  • Good student discounts
  • Installing car alarms
  • Defensive driving courses
  • Drivers ed courses
  • Long-time customer
  • No accidents in past 3 years
  • No moving violations in past 3 years

Armed with your new knowledge, you should be best prepared to lock in the best vehicle insurance policy for your situation.

Best of luck saving money and getting the best auto insurance rate!

Posted on December 1, 2011 by in Automobiles

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