How To Lower Your Auto Insurance Cost
Prices vary from company to company, so it pays to shop around. Get at least three price quotes from your agent. If your agent is a captive agent (agent who can offer you quote from ONE insurance company ONLY. For example, agents who work for Farmers, Allstate, State Farm, American Family, etc). Then you need to look for independent agents who offer policies from several insurance companies.
Don’t shop by price alone. There are only three types of buyers:
Dollar Store Buyers (customers who only care about price not quality)
Wal-Mart Buyers (customers who are willing to pay a little more for quality & service)
Nordstrom Buyers (customers who care ONLY for quality & service. Price is their least concern)
Which one are you? Ask friends and relatives for their recommendations. Contact your state insurance department to find out whether they provide information on consumer complaints by company. Pick an agent who takes the time to explain the coverage properly and answer your questions.
COMPARE INSURANCE COSTS BEFORE YOU BUY A CAR
Before you buy a new or used car, call your agent for insurance costs. Car insurance premiums are based in part on the car’s price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. To help you decide what car to buy, you can get information from the Insurance Institute for Highway Safety (www.iihs.org).
OBTAIN HIGHER DEDUCTIBLES
Deductibles are what you must pay before your insurance policy pays its part. Getting higher deductibles, will lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15% to 30%. Going to a $1,000 deductible can save you 40% or more.
REDUCE COVERAGE ON OLDER CARS
Consider dropping collision and/or comprehensive coverage on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective.
BUNDLING HOMEOWNERS AND AUTO COVERAGE
Many insurers will give you a break if you buy two or more types of insurance. You may also get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce the rates for long-time customers. But it still makes sense to shop around! You may save money buying from different insurance companies, compared with a multi-policy discount.
GOOD CREDIT SCORE
Establishing a solid credit history can cut your insurance costs by 25%. Most insurers use your credit information to price auto insurance policies. Research shows that people who effectively manage their credit have fewer claims. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.
LOW MILEAGE DISCOUNTS
Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who car pool to work.
Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups or from other associations. Ask your employer and inquire with groups or clubs you are a member of to see if this is possible.
Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also get a discount if you take a defensive driving course. If there is a young driver on the policy who is a good student, has taken a driver’s education course or is away at college without a car, you may also qualify for a lower rate.
When you are comparison quotes, inquire about discounts for the following: *
Antitheft Devices Auto and Homeowners Coverage with the Same Company College Students away from Home Defensive Driving Courses Drivers Ed Courses Good Credit Record Higher deductibles Low Annual Mileage Long-Time Customer More than 1 car No Accidents in 3 Years No Moving Violations in 3 Years Student Drivers with Good Grades
*The discounts listed may not be available in all states or from all insurance companies.
The key to savings is not the discounts, but the final price. A company that offers few discounts may still have a lower overall price.