Auto insurance rates vary widely, so it’s always good for you to check other company’s rates from time to time in order for you to get the best deal possible. It is also a good idea to compare rates and policies when you buy a new car since your new vehicle may be in a different category than your old one.
Understand Auto Insurance Policy Coverage
First, make sure you understand everything your current auto insurance policy covers. You do not want to be comparing policies that are not equal in coverage. Compare the amounts of coverage, your deductibles and any extras like rental car coverage or emergency repair services.
Second, ask about discounts that the car insurance companies offer. Some insurance companies offer discounts to their customers for things like low annual mileage, good driving records, multiple car discounts and even good grades (for student drivers). Also, some of the equipment on your car may make you eligible for reductions in auto insurance rates; security systems, alarms and vehicle tracking systems are all valuable when it comes to calculating insurance rates.
Ask For Insurance Quotes
Now, it is time to ask for insurance quotes. Make sure you contact multiple auto insurance companies with the same scenario and carefully compare the rate quotes you get. The existant of internet has makes us easy to get in touch with different insurance companies easily and quickly. You can even find many websites that will allow you to key in your particulars in the site, once you complete to fill up all the required information, you may just press the submit button and it is going to send you information to several car insurance providers. Since auto insurance is a highly competitive market, it pays to be a discerning customer.
How Car Insurance Companies Determine Insurance Rates
Looking for car insurance can be confusing. After all, there are dozens of companies all promising to provide the best service. When you have so many companies claiming to provide the same coverage, then why is there such a wide range in price? Shouldn’t they all cost about the same?
Most companies, when determining coverage for a particular driver, rely upon a tier system. This system varies from company to company but the majority of insurance companies rank drivers into one of three tiers: preferred, standard, or substandard. Someone who would be classified as a preferred customer would be someone who has used the same company for a few years, someone who during that time has not had any accidents or claims against the insurance, someone who carries full coverage, more than what is required by law, and someone whose annual mileage is low. This person will also have no DMV points on his/her driver’s license.
On the other hand, a substandard driver would maybe have a lapse in insurance coverage greater than 30 days, more than one at-fault accidents in the past three years, a DUI, DMV points greater than six, or other-than-collision claims that are greater than $500. The people in between would be standard drivers. This tier system is fairly universal although there are little intricacies specific to each company. However, the discrepancy in car insurance rates comes into play when these companies have many more tiers. If one company has ten tiers and another has fifteen and you have a pretty clean record, but a few blemishes here and there, company one might rank you as the ninth of ten tiers, yet the second company might rank you as tenth of fifteen. As such, you will get a better rate from the second company.
How to Save on Auto Insurance
We may not be able to get away with not having auto insurance, but many of us pay too much for it. Just like anything else, it literally pays to shop around – but that’s only one way to
save money on auto insurance.
Do shop around for the best rates. It’s the easiest way to save and with the internet, it’s quick and simple. Use a site like Lowermybills.com or Insurance.com to get comparisons, then go for it. Often, the reason we don’t change auto insurance companies is because we’re stuck in a rut or we have some false sense of loyalty toward a company or agent. Realize that if you have too many accidents or don’t get your bill paid in time, they’ll dump you. Their only loyalty to you is your money and that’s the only way you should look at them. If they cost you money, dump them.
Once you’ve found the right company, look into bundling your auto insurance, home insurance and whatever else you can. Most insurance companies offer discounts if you use them for all of your insurance needs. Ask about this if it isn’t in their advertising. If they won’t give you a discount, they may not be the company for you.
Every insurance company has discounts and pseudo discounts, so find out what they are. It may very well be worth the trouble to attend a defensive driver’s class to get a lower auto insurance rate. Other possible discounts:
– Good driver, meaning no accidents or citations over a period of years
– Multiple policy where all vehicles in the family are insured by the same company
– Safe car discounts if you car is equipped with airbags and/or anti theft devices
– Good student discount if you maintain a high grade average
– Senior citizen or retired discount.
Get Alternative Ways to Finance a Car
Find alternative ways to finance a car so you won’t have to have a lien against it. You don’t need full coverage if your car isn’t financed by a lending institution. You may be able to use a home equity loan or borrow against a life insurance policy. You may be able to take a personal loan or put something else up as collateral. Some of you may be able to sell your old vehicle or other things to come up with the money to buy a vehicle outright. Do it. It will save you insurance money as well as interest on a loan.
Before you buy a vehicle, check to see what the insurance rate will be. Some vehicles are a higher risk and will cost you more. Sporty or “muscle” cars may have higher insurance rates because the type of person who drives them tends to take more risks. Certain automobile colors are involved in more accidents because they’re harder to see. An important factor in determining the rate for a particular vehicle deals with how often that make and model is stolen. Another one is how expensive it is to repair or replace a vehicle when it’s been in an accident. The only way to know is to contact your insurance agent and ask about any vehicle you’re contemplating buying.
Don’t drive more than you have to. If you can keep your driving down to less than 6,000 miles a month, you may get a better rate.
Keep Your Car in A Garage
If you have a choice, keep your car in a garage. This can also lower your auto insurance rate because there’s less chance of it being stolen or damaged (deliberately or not) when parked.
Raise your deductible, but not so high that it will hurt to pay it if you should have an accident. The best tactic is to put aside or build up savings to equal the deductible you want. Most companies will cap the amount at $500 or $1000, so find out before you make your plan.
Ask you insurance agent to figure the minimum coverage your state allows. It’s usually a reasonable figure – the state doesn’t want you to be without good insurance. Your insurance agent wants to sell you as much as he can. Don’t let him. ‘
To really see that bill go down, put every one of these ideas into practice that you can. It’s worth a little work and a little time to do it because once you’ve done it, you’re set for awhile. If you can save as little as $5 off a monthly payment, that’s $60 a year. If it takes you two hours to cover all of this, you saved $30 an hour. That’s not bad.