Car insurance is a necessary evil; we are required by law to have it, yet we hardly ever use it. Like all other bills, I have researched ways to save money on car insurance that actually work. Some of these options are well known and some are new. To be thorough, I have included the old and the new ways to save money on car insurance.
Multiple line discount – insure all cars and homes with the same insurance company to receive a discount
Update agent if recently laid off or work from home – Driving less miles per week, usually less than 100 per week can reduce your policy rate.
Discount for Safe Driver – You might be eligible for a rate reduction if you have not been in an accident or received a ticket for several years.
Increase your deductible – A deductible increased from $250 to $500 can save a family hundreds of dollars a year. However, if you increase your deductible, make sure you have the extra $250 if you have to file a claim.
Comparison shop – Let your agent know that you are looking at other agencies to reduce your monthly premium; it is likely the agent will pull some strings to keep you as a customer. Caution: if you find a better deal, confirm that it is not an introductory price. Many times your premium will increase to what you were paying with your previous insurance agent.
Under 25 parent discount – At the age of 25, car insurance premiums decrease because insurance companies feel the driver is now more experienced. However, parents under the age of 25, will also receive this discount because the insurance companies feel a parent is more responsible. Note: you will not receive another reduction once you turn 25.
Full coverage or liability – An insurance company will not spend more money repairing a car than it is worth. Therefore, check the value of your car using Kelley Blue Book and determine whether full coverage if still needed or if it is best to switch to liability.
Get quotes before buying a new car – The make, model and color of a car will influence your premium cost. So before you go out to purchase that red sports car, or black Hummer, check with your insurance agent, the increase in policy price might scare you. Also, certain cars are stolen more often for their parts and increase the cost of the premium.
Don’t buy short-term policies – There might be a penalty so buy long-term.
Never let your insurance policy lapse ” it might be difficult to obtain insurance again because the insurance agents see you as irresponsible or high-risk and your insurance may be more expensive than it was before to renew.
Only insure cars that you drive – The old Ford that has not been driven in years should not be insured. However, depending on the state you live in, all registered vehicles must be insured. To avoid any problems make sure you register any non-working vehicles as ‘inoperable’.
Refresh your driving skills – Many insurance companies are now providing courses where people can refresh their driving skills. However, fees are applied to these courses; therefore, determine if reduction in your premium will be worth the cost of the course.
Avoid accidents and tickets – Speeding tickets, moving violations, and accidents can substantially increase your rates for at least 3-5 years.
Don’t insure teenager driver with your car – Premiums for a teenager driver is through the roof. Instead, purchase a safe, used car and only purchase liability. You will save hundreds of dollars.
Have good credit score- I don’t agree with this step for determining policy price, but some insurance companies are now using credit scores to calculate the cost of your premium. High credit scores have lower premiums and low credit scores have high premiums. Keep your score high.
Pay semi-annually – This is my favorite!! A surcharge fee is generally applied to customers who pay monthly. This fee is easily avoided by paying semi-annually. Begin to save up enough money to make the 1st semi-annual payment. After you make that payment, automatically transfer the monthly insurance payment into a high-yield savings account to earn interest. When you receive your semi-annual bill, pull money from your high-yield savings account to cover your premium cost. Any money earned from interest is profit.
Happy Savings!!
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