Most of us need our car for commuting to work and other purposes. Most of us also know that we need car insurance. Auto accidents occur frequently and a bad accident could mean more than just the loss of our favorite set of wheels- it could also mean a liability lawsuit that could spell financial disaster without insurance to cover the bill.
We all know the obvious ways to reduce insurance costs, like avoiding accidents, keeping points off of our driver’s licenses, purchasing less expensive cars, etc. But there are other, practical ways to control car insurance costs and many can be enacted immediately. Let’s take a look:
Increase Your Deductible- This is the quickest, simplest way to reduce car insurance premiums and it involves nothing more than placing a phone call to your insurance provider. Deductibles are usually in the $100 to $1,000 range and premiums can drop significantly as deductibles increase. If you presently have a low deductible, consider stretching it to $500 or even $1,000 and watch your premium payments fall.
Insure Multiple Vehicles Under One Plan- If you have multiple vehicles and/or multiple drivers, move everything to the same insurance plan. It will almost always save money compared to the cost of two separate plans. Think of it as getting a bulk discount: You are purchasing more services from the same company, so you can expect to be rewarded with a lower, per unit cost.
Consider Insurance Bundling- If feasible, switch your car and home insurance to a single provider. As with the multiple vehicles/drivers tip above, insuring more than one item with the same company will almost always result in lower overall cost. If your car insurance provider doesn’t offer homeowners insurance, then consider switching to another provider that offers both.
Enroll in a Defensive Driving Course- Some car insurance companies offer discounts to drivers who enroll in a defensive driving course. Check with your insurance provider to see, before you enroll. The cost of the course will easily pay for itself in a very short time with the resulting reduction in premiums.
Eliminate Unneeded Coverage- If your coverage exceeds what you need or what you will get if you have an accident, then eliminate it when possible. For example, if I am driving around a ten year-old car with a blue book value of $2,000, then it would make no sense to have $5,000 in collision coverage. Even if I totaled my car, the insurance company would not give me $5,000. They will only give what the vehicle is truly worth. Eliminate the excess coverage and save some money in the process. This is a common- sense financial move, but many do not even think about it or they signed an insurance agreement without even realizing the excess coverage agreed to.
Stop Making Monthly Insurance Payments- Another way to save money on car insurance is to pay once every six months instead of once every month. Insurers like receiving money up- front and many (but not all) insurance companies will cut your cost if you pay them this way. Monthly payments often carry added convenience fees as well as slightly higher rates, so switch to a twice per year payment plan, if you can.
Comparison Shop for the Best Rates- If you are not sure whether or not your current auto insurance rate is competitive, then go online and shop around for different rates. Netquote.com is one possible place to make comparisons quickly. You will likely get a bunch of annoying inquiries from sales people, but you will also find some very good deals that can add up to significant savings.
Auto insurance is more than just a necessary evil. It is required in most states and consumers often face financial penalties, inability to renew a driver’s license, and other sanctions if they fail to conform. Thus, auto insurance is a necessity, but it doesn’t have to be excessively expensive. Keep the above tips in mind, do your research, and find the best deal possible for you and your family. A little effort today can help save money immediately and continue to save money through the course of the year.
Copyright 2012, Bryan Carey
