Like most people, you probably hate paying for insurance. But no matter how good a driver you are, you can never predict what is going to happen on the road even if you follow all the rules. Getting the right insurance policy is often the only thing that stands between you and financial calamity.
There are several ways to save money on car insurance. Following the tips below will ensure that you’re getting the protection you need at the lowest rates possible.
1. Protect your no-claims bonus
On the flip side though, your premium could rise by 30 percent if you make a claim.
Although accidents caused by another driver will normally have no impact on such a bonus, those caused by the insured driver could. If you’re hit by an uninsured driver, even if it isn’t your fault, you could lose your no claims discount if you don’t comply with your insurance policy. It is important to always check the policy carefully and read the small print.
2. When buying insurance, use both a broker and a comparison site
If you want to find the least expensive auto insurance policy available, you’ll need to compare policies from various companies. Auto insurance comparison sites are great because of the savings you can potentially make. In a matter of minutes, you can have multiple quotes from top carriers with high ratings. All you need to do is plug in your details. The process is simple, quick and convenient.
However, there is a hidden danger in using comparison sites, and the repercussions could be huge. The problem is that most people are focused on cost savings instead of appropriate coverage, which could lead you to inadvertently choose policies that isn’t right for you.
The safest way to get cheap auto insurance is by combining the services of an experienced insurance broker with the convenience of a comparison site. The typical problem with an insurance broker is that most of them with a definite set of companies so you’re not getting the whole universe of possible options.
By using a comparison site to access the full market as well as a broker, you’ll be getting the best of both worlds. If you find great deals on a comparison site, consult with an experienced broker to ensure that you the coverage is right for your circumstances. You can even ask if they can match the deal if it proves adequate for your needs.
3. Raise your deductible.
The deductible is the amount of money that you are responsible for paying out of your pocket in the event of an accident before your car insurance coverage starts to have effect for any claims for insured events. The amount of the deductible will directly affect your premiums. For instance a policy that has a low deductible will have a higher premium and vice versa.
Naturally, you’d want this number to be as low as possible, but that could work against you. And that is because keeping a high deductible ensures that the insurance companies can offer a cut in premium costs.
Paying a higher deductible tells your carrier that you would be less likely to file a claim if you are able to absorb the cost of the repairs. This means you represent a low risk in the eyes of the provider.
To save money on your insurance, keep in mind that making a claim will cost you higher premiums. For example, asking your auto insurance company to make a $600 repair when you have a $500 deductible is only going to net you $100. This will increase your premiums significantly for the next three years. Saving $100 now isn’t worth increasing your monthly premium for the next three years.
4. Maximize your credit rating
There is a direct correlation between credit scores and the premiums you pay on insurance policies. Most insurance providers use credit scores in determining the rates for insurance policies. People with high scores tend to pay lower premiums. This is why it is necessary to take whatever steps you can to maximize your credit score.
The higher you are able to get your credit score, the lower your insurance premiums will be because the insurance companies will see you as a safer risk. Focus on improving your credit score as it will pay off with much lower insurance premiums.
5. Make your car more secure
If you live in an area that is associated with higher incidents of theft and crime in general, your insurance premiums will be very high even though you may not have been a victim. You can reduce your costs by minimizing the risks to your vehicle.
Car theft is a major cost factor in insurance premiums. You could reduce this threat by adopting security measures such as parking your car in a secured garage or in your driveway rather than on a street, or fitting it with an anti-theft system such as an alarm or an immobilizer. Both of these measures reduce the risk of your car being stolen, which will eventually pay off for you in lower premiums.
Once you adopt these security measures, you’ll need to make your insurance provider aware of them. They will notice the lower risk and offer a considerably lower premium on your policy. This can attract a discount of around 5%.
6. Qualify for driver’s ed discount
If you’re a young driver, the best way to overcome high insurance premiums is through the so-called driver’s ed discount. This is one of the insurance industry’s best kept secrets, one which can have a significant impact on reducing your insurance premiums. Although it is not standardized, research shows that getting a driver’s ed discount could save you a substantial amount on your premiums. In fact, some providers may offer credits of up to 20 percent for qualifying driver’s ed programs.
The exact value will depend upon the policies of your insurance carrier. Note however, that insurance companies offer deeper driver’s education discounts to younger drivers who haven’t had time to form bad habits behind the wheel. Education discounts to older drivers may not be that substantial.
7. Your occupation could save you thousands
Insurers have found people in certain industries represent less risk because they tend to file fewer claims than people in other industries. Consequently, many auto insurance companies will consider your educational background and occupation when setting car insurance rates. This means that the level of your education or the nature of your job could lead to higher or lower insurance premiums.
According to carinsurance.com, here are the top 8 jobs for cheaper insurance:
- Educators – includes college professors and school teachers.
- Firefighter – because they live close to their jobs.
- Police officer – they tend to live close to their place of work.
8. Be a better driver and sign up to a black box.
Black box policies (known as telematics) are designed to reward you for being a responsible driver. The way it works is, the provider mounts a black box in your car that carefully monitors your mode of driving. It checks your speed, how you drive and when you are on the road. Once you begin to prove that you’re a good driver, you’ll start to see your premiums coming down.
9. Use less mileage.
The less you use your car, the more savings you can make by shopping around and enquiring about low-mileage discounts and programs. It is important to be honest about your annual mileage, as lies and inaccuracies will jeopardise any claim.
If you don’t use your car to drive to work or for business – both things that increase your premium – you may be able to get a cheaper rate. Provide accurate information about your car, and make sure that your average annual mileage is correctly included in your policy.
10. Obey the laws of the road.
Maintain a good driving record with zero tickets and accident-free report. Obey all of the laws of the road. Even an unpaid parking ticket can drive up your insurance premiums. Keeping copies of all documentation to check for errors when they are made by the law enforcement agencies will pay off in lower insurance premiums.
Even if you may have been in accident that may have been your fault, as long as you have a clean record and the accident was not serious and did not involve serious injuries, these types of incidents will stop affecting your rates after a period of three years. However, if you got hit with a DUI, this will continue to affect your premiums for as much as ten years, no matter what you do.
11. Etch your VIN number into your windshield and windows
Having your VIN number etched into your window can possibly reduce your insurance by up to 15 percent. Make sure you inform your insurance agent once you’ve done this to take advantage of possible savings. You can etch the number into the window yourself for less than $20.