How does car insurance work? To understand how car insurance works (and your rates), you have to consider the position of the car insurance company. They are taking the risk on you, so things that tell the car insurance company that you are a low risk will lower your car insurance rates.
There are several things you can do to get the best car insurance rates and lower your current car insurance premiums. So here are a few car insurance tips to help you do that.
1. Ask For Current Discounts From Your Insurance Company
There are a lot of car insurance tips and ways to decrease the cost of your car insurance, so make sure to specifically ask your current car insurance company about what kind of discounts they offer. An example of these would be: multiple driver discounts, senior discounts, low risk occupations, good driving discounts, and many others.
2. Drive Safe and Defensively
If you follow this basic car insurance tip, you will lower your premiums for the long term compared to some other discount such as multiple drivers. You may not always have multiple drivers, but you can always drive safely. If you continue to have a good driving record you will be able to reap the benefits of lower car insurance rates.
3. Safety Belts, Car Alarms, and Air Bags
Many car insurance companies will give you a discount just because your vehicle has the right safety features such as seat belts, car alarms, and air bags. Ask your insurance company.
4. Pay For Your Car Insurance Policy In Full
This is one of the most important car insurance tips. If you pay for your car insurance premiums annually or every 6 months, you will be able to get discounts rather than paying your premiums monthly. Not everyone will be able to afford to do this, but if you can, this is a must. Also, just like any loan, you may be offered a discount if you pay electronically rather than by standard mail.
5. Compare Car Insurance Quotes With Multiple Companies
Here is the simplest car insurance tip, just shop around for the best car insurance rates. By doing this, you can compare the rates from a number of companies and take the lowest car insurance quote you can find. You can do this by going directly to your insurance company or agent, but the easiest way to find the best car insurance rates is to do this online. It takes maybe 10 minutes and you can get multiple quotes from multiple car insurance companies.
6. Keep A Good Credit Standing
This goes beyond the basic car insurance tips, but to your credit history in general. When you have good credit, insurance companies see this as a responsible person, and less likely to be in a car accident, thus, they will give you a better car insurance rate. Keeping a good credit standing with all of your debtors will not only help you with lower car insurance rates, it will help you get the best rate on car loans, and other personal loans…this will save you tons of money in the long run.
7. Drive Less, Pay Less
Most car insurance companies will give drivers a lower car insurance rate because they don’t drive a lot. If you drive under a specific amount of miles per year, you may be able to get a better car insurance rate. Ask about this with your insurance company.
8. Increase Your Deductible
Another one of the simple car insurance tips is to just increase your deductible amount. When you are willing to pay more up front when an accident or something happens, the lower your car insurance premium will be. A $250 deductible will cost you more in a premium amount than a $1000 deductible would.
Another aspect of car insurance that requires careful consideration are the deductibles. All insurance policies have a deductible, and it is the amount that you have to pay first in the event of an accident. The deductible amount also vary by state, but are usually in amounts of $100, $250, $500 or $1000.
Suppose, unfortunately you have an auto accident and your deductible is $250, and the cost of damages is $3000, you will be paying $250 first, and your insurance company will have to pay $2750. Of course this low deductible comes with higher premiums. There are some factors to consider, when choosing a deductible amount like your financial situation and the amount of money you are willing to take out of your pocket to cover an unexpected car related expense.
