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Learning how to get cheaper car insurance can help save you time and money. When you understand the different car insurance coverages, you can find the car insurance that best suits your needs and budget. If you have high car insurance and need to find something more affordable, there are many ways to lower your insurance rates.
Ways To Get Lower Car Insurance
One of the simplest ways to lower your rates is to consider dropping certain insurance coverages, thus reducing overall costs. It is unlikely anyone could predict when an accident will happen, but having full coverage on an older vehicle could be overkill. According to Investopedia, choosing to drop specific coverage types, such as comprehensive or collision, depends on your driving record, insurance costs, and many other factors. If you are paying $500 per year for collision coverage, but the car is only worth $1000, you may want to consider dropping the coverage.
Insurance companies sometimes reward drivers who take an approved defensive driving course with discounts on their insurance premiums. Drivers with points against their licenses can also benefit from completing an accident prevention, defensive driving, or another type of course.
Deductibles are typically chosen by the customer, putting you in charge when selecting your car insurance. A deductible is an amount you will need to pay prior to the insurance company stepping in to pick up the rest of the cost. Circumstances that require a deductible include:
- Theft
- Accidents
- Other types of damage
Deductibles can range between $250 and $1000. The deductible directly affects the annual premium, with lower deductibles equaling higher premiums.
The opposite is true as the premium drops when you choose the higher deductible, but you will want to ask your agent before making this decision. This decision may give you some financial relief with a better annual premium, but sometimes it will only be minimal savings. If you typically choose to file major claims over small ones, a higher deductible could be a good way to lower your insurance costs.
You can install certain devices on your vehicle to help lower premiums. Your insurance company can give a detailed list of such devices and how much of a discount they provide. LoJacks and car alarms are two of many products you may want to look into. You will need to determine if the cost of having an anti-theft device or other types of equipment installed will be cost-effective when compared to the amount your premium will drop.
Being a safe, low-mileage driver can be of benefit in lowering your car insurance when you take advantage of a usage-based insurance program, also referred to as black box insurance. Different insurance companies have such programs such as:
- Allstate’s Drivewise
- Progressive’s Snapshot
- State Farm’s Drive Safe & Save
These programs rely on a telemetric tracking device installed in your vehicle, so your insurer can track when you drive, how well you drive, and how much you drive. If you drive 10,000 miles or less in a year, you may be eligible for this type of program.
Insurers have a variety of available discounts you can research. You may find different types of discounts that may include, but are not limited to:
- Long-time customer
- Student drivers with good grades
- Multi-car discounts
- No accidents in three years
- Higher deductibles
- No moving violations in three years
- Anti-theft devices
- Good credit scores
- Home and car insured by the same company
- Drivers ed courses
- College students living away from home
- Defensive driving courses
- Low annual mileage
You can lower your insurance costs if your credit history is substantial, according to the Insurance Information Institute. When you apply for coverage, most insurance companies will use your credit report as a guide to pricing your insurance policies. Research indicates that those who manage their credit well make fewer claims. Keeping your credit in check is as simple as following a few steps:
- Don’t obtain more credit than needed
- Pay bills on time
- Keep credit balances low
Errors can occur on your credit report and will need to be dealt with promptly to keep your score updated.
Price comparison websites can come in handy. These types of websites provide you with an opportunity to choose the insurance company with the least expensive car insurance. You can use sites such as Compare.com, where you can get real-time data from smaller brands and big-name companies alike. You can use this information to make sure you are getting the best deal in your area.
As the cost of new vehicles increases, car insurance costs are on the rise nationwide. This rise is also, in part, due to the litigious nature of drivers. As long as these factors persist, car insurance prices won’t be dropping in the near future.
Insurance rates for teens are typically higher, but discounts are available. Grades can factor into a discounted rate as long as your teen ranks in the top 20 percent of their class or maintains a B average or better. These discounts usually carry through until your child is 25. If your teenager qualifies for a student discount you could save as little as 1 percent or as high as 39 percent, making it worthwhile to supply the required documentation to your insurance agent.
How To Choose a Good Car Insurance Company
When choosing a car insurance company, you can check out sites dedicated to rating different insurance companies’ financial strength. Though your insurance company’s financial stability is extremely important, the coverage in your contract is also essential. You must understand the terms of your contract and how you are covered. Insure.com’s site uses data assembled by Standard & Poor’s to provide you with insurance company ratings.
Getting cheaper car insurance will take some effort, and you will have to do some research. Taking the time to do this will ultimately put more money back in your pocket. Every person’s situation is different, and what works for someone else may not work for you, so stay vigilant and explore all of your options.
Sources Used:
https://www.caranddriver.com/research/a32879450/cheapest-car-insurance/
https://www.caranddriver.com/research/a32733226/what-is-collision-car-insurance/
https://www.investopedia.com/articles/pf/08/car-insurance-costs.asp
https://www.iii.org/article/nine-ways-to-lower-your-auto-insurance-costs
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