Auto insurance policies are mandatory for all automobiles on the road today. Different ownership statuses required different coverage. Leases require the highest form of coverage, while financing requires specific comprehensive, collision, and damage levels determined by state. Unfortunately, different incidents can increase premiums by almost quadruple the original amount. Knowing how to lower your auto insurance bill can save a two-car family well over hundreds a year.
(1) Driver History
The number one way to reduce your premiums is to maintain a good driver status for all insured drivers. This means no at-fault accidents, no tickets, and no points on a license. Some insurance companies use a time frame of 3-years, while other may use a 5-year time frame for a good driver status.
(2) Ask about discounts
Multiple car discounts can save up to 20% off your total bill. In some states, multiple policies, such as homeowners, renters, and life insurance can save even more. Ask about organization and membership discounts, such as alumni organizations, academic membership organizations, AAA, and other discounts. Good student grades could possibly earn a discount.
(3) Driving Courses
Defensive driving classes can help reduce premiums with numerous insurance companies. Ask your agent if a minor driver can take a driver’s education course for a discounted premium. If you have points or moving violations on your record, occasionally, an option to reduce points includes taking approved defensive diving course.
(4) Credit Rating
Some companies base your premiums on your credit rating, while other policies never check your credit. If you have a stellar credit score, you may want to shop for a company that gives discounts for high credit ratings. For others with lower scores, you may be better off with an insurance company that bases their premiums on different factors. Either way, a good credit rating will help with your available options for insurance, as well as financing.
(5) Your Automobile
Know what your automobile will cost to insure. More expensive and foreign cars, typically, cost more to insure. Some models have crash test ratings that are above par, which reduces the premium for that car. Commuter cars and older model cars are usually the cheapest to insure.
(6) Your Location and Habits
Although no one would actually move simply to lower insurance premiums, your location does have a bearing on your premium price. Your driving habits (i.e. commuting times) also affect your rates. Your average annual commuting miles are taken into account when you insure your car. In general, the more your drive, the more expensive your premiums.
(7) Play with your policy
Know what you need and are required to carry by your state. If you have two automobiles and can make do without one for two weeks, then rental is not needed. Lowering your deductibles will likely raise your premiums. Increasing your deductible to $1000 will lower your monthly payment but you will be required to pay the first $1000 of repairs in the event of an accident or damage.
When choosing insurance, keep in mind that cheaper is not better. High deductibles may lower your monthly cost, but if you cannot pay that deductible in the case of an accident, the lowered cost is useless. Be sure to ask your agent for different quotes and ways he or she can help you lower your price without leaving you with a high risk.