Shopping around for new car insurance every now and then is a great way to save money. Here’s what you need to do when looking for a lower premium while retaining the coverage you need.
How You Can Benefit From Constantly Checking
Much like auto extended warranties, the elements that determine premiums on auto insurance are always constant. You may have recently gained a few points in your insurance-based credit score, had a job upgrade or been involved in an at-fault auto accident. These can lead to a rise or a dip on how auto insurance companies perceive risk, which also affects the premium that you’ll be paying.
Believe it or not, the vehicle insurance premium that’s causing you a headache can turn into one that can save you money each month simply by looking at the better offers in the insurance market. Shopping often leads to significant savings as you could review and control the elements that make up the auto insurance premium.
Car insurance premiums have risen significantly over the course of 12 months- in August of 2017, the percentage has risen to approximately 8 percent, or 4 times the rate of inflation. This means that a huge chunk of your monthly income is being consumed by your current car insurance if you’re in the median household income.
Higher Premiums On Credit-Based Insurance Scores
You may not know it, but you may be paying a higher premium due to having a credit-based insurance score. Most auto insurance companies base premiums on insurance credit score, and those who have a median credit score may be forced to pay a few hundred dollars more on their premiums even if they have a good driving record. The method of computation is different for each car insurance company, and the system can vary than that of the regular FICO methods.
Rising premiums have also led to the fact that there are now approximately 30 million motorists driving without auto insurance coverage. Bumping into an accident with one can lead to you paying for all the liability costs.
Auto insurance coverage is essential for peace of mind, but it doesn’t have to be heavy on your wallet. Here’s what you can do to get the optimal premium for your car insurance.
Shop Every 2-3 Years
Checking the rate at least once every two to three years can get you the coverage you need for a lower price. Simply checking out a couple of car insurance companies and seeing what they’re offering will give you an opportunity to save money. It’s a good idea to look around whenever your personal circumstances change, i.e., you’re adding a teen driver or if you recently got married, etc. Call your current insurer and inquire about how these life changes will affect your auto insurance coverage and premium, then ask around and see how they compare. Get your current policy and review it as you talk to different auto insurers; pay attention to specifics such as moving violations and at-fault accident claims because this will be asked each time you request for a quote.
Choose The Best Auto Insurer
It’s not always about getting the lowest available premium. A lesser-rated insurer may set the premium lower but in reality you could be paying a higher cost if you get involved in an auto accident as the agents will be low-balling estimates and asking repair shops to cut corners on replacement parts and services. Last but not the least, a shady auto insurer can raise the premium price after you get involved in a car accident. It’s best to balance it out by checking an insurer’s reputation, service and agent access.
What’s The Right Deductible?
The rule of deductible is such that a higher deductible equals lower premium as you’ll have to pay out-of-pocket in auto claims. If you haven’t had an instance of an at-fault accident and generally keep a clean driving record, then it’s a safe bet that you can opt for a higher deductible on collision. Just be prepared in case you get involved in any unforeseen circumstances.
Review Your Coverage Thoroughly
Don’t skimp out on your coverage by going for the state minimums because liability coverage covers almost all property damage and/or physical injuries in the event of an accident. Common sense states that you can save more money by getting all the coverage you may need- a costly claim can cause a significant financial strain if you’re not careful. To start with, get a 100/300/100 coverage, which pays for physical injuries for up to $100,000, covers $300,000 in total costs per accident and pays for property damage for up to $100,000. The rule is that you should get a higher coverage for physical injury if your net worth is high.
As mentioned earlier, there are more and more motorists out there who don’t have auto insurance. You can protect yourself and get the underinsured/uninsured motorist protection that has the same coverage as your liability. Let go of your collision or comprehensive coverage when your car exceeds 10 percent of its book value. You won’t need rental reimbursement coverage if you have 2 or more vehicles. In the same vein, you can forego roadside assistance if you’re a member of an auto club. What’s more, you can let medical payment and personal injury protection go if you have excellent health insurance in place.
Controllable Cost Factors
Choose Your Car. Premium costs will depend on the car model. Get a list of the vehicles you want and run them by your insurer for premium quotes.
Teen Driver Risk. Adding a teenage driver will run your premium by up to 90% at an average. Ask your current insurer on the costs of adding one, then shop around for a better deal for the same kind of coverage.
Reporting Reduced Mileage. Miles driven per year is a large factor in auto insurance, with the average being 12,000. If you’ve recently changed jobs or have a shorter commute, then you can potentially get a lower premium. For example, commuting 6 miles less than before will give you 3,000 less miles per year, which translates to a lower premium by about $50. By letting the insurer know about life changes you can save up to 10% on car insurance premiums.