Thursday, November 21, 2024
MoneyTips to get low-cost car insurance

Tips to get low-cost car insurance

With the increasing cost of living, most people look for ways to save as much as possible on significant expenses like insurance. Car insurance can protect one financially while driving. But ensuring that one gets the best deal possible with low-cost auto insurance, whether it is full auto coverage or basic liability insurance, is important. If one wants to learn how to get cheaper car insurance, there are some tips that can help them.

1. Shop around

Car insurance prices vary from company to company, so always shop around. Before deciding on a company, one must have at least three quotes in hand. Individuals can search the company website or request an agent to get quotations from insurance providers. Sometimes, the state insurance department also offers a price comparison reflecting the prices of some top auto insurers. 

While it helps to get low-cost auto insurance, this should not come at the cost of one’s peace of mind. The idea behind car insurance is financial protection, so one must zero in on a financially stable company. The simplest way to access the insurer’s finances is through rating companies like AM Best. Alternatively, exploring consulting consumer magazines can also be beneficial.

2. Make the most of multi-car discounts

Naturally, when one chooses to insure a single vehicle, the premium payment is higher. In contrast, when one decides to insure multiple vehicles with the same company, they can avail of low-cost auto insurance. This happens because insurance companies want more business from their customers. So, they are willing to offer a discounted bulk rate. 

To receive a bulk rate, the drivers must be related by marriage or blood. Typically, they also need to have the same residence. While some companies may offer a discounted rate to two unrelated individuals, for this, they must jointly own the vehicle.

Further, the premium cost is higher if one of the drivers is a teen. But, some companies offer substantial student discounts for good students. For this benefit:

  • The student must have a B average or higher grade. 
  • The student should rank in the top 20 percent of the class.

Good student discounts are applicable only until the individual reaches 25. The discounts will vary from one company to another. Typically, they range from 1 to 39 percent. Parents seeking good student discounts must always furnish proof to the insurance agent.

At times, companies might offer a discount on auto insurance if the customer maintains other policies. For instance, Allstate provides nearly a 25 percent discount on bundling auto and homeowners insurance.

3. Improve the credit score

In most states, the credit score is a crucial factor in the insurance quotes that the customer receives. But Massachusetts, Hawaii, and California are a few states that do not allow insurers to use the credit score when assessing auto insurance rates.

According to many top companies, one’s credit correlates with their probability of filing the claims. A customer with poor credit usually has to bear a high insurance rate, mainly by a few 100 dollars. For individuals looking to get cheaper car insurance, they can consider building their credit score by:

  • Reducing overall debt
  • Paying loans and credit card bills on time
  • Keeping a tab on the credit score

4. Enroll in the defensive driving course

Some insurance companies offer discounts to drivers who undergo an approved defensive driving course. Sometimes, the drivers can also lower the points on their license by enrolling in the accident prevention or a defensive driving course.

But to ensure that the cost of the course translates into insurance savings, always ask the agent or the insurance company about the discount before signing up for the class. Further, the drivers must enroll in the accredited course only. Accreditation rules may vary according to state. So, before applying, carefully go through the rules. Companies like GEICO let the drivers check these rules by state on their website.

5. Request for a higher deductible

Deductibles are the amount one pays before the policy begins. A higher deductible can reduce the costs substantially. For instance, when a customer increases the deductible from $200 to $500, it can lower the comprehensive and collision coverage cost by 15 to 30 percent. Likewise, opting for a $1000 deductible can save up to 40 percent or more. But when opting for a higher deductible, ensure adequate money is set aside to pay when there’s a claim.

6. Reduce the coverage on older vehicles

It helps to drop comprehensive or collision coverage on older cars. For instance, when an older car is valued ten times lower than the premium, buying coverage may not be feasible. One can inquire about an old car’s value directly from the auto dealers. Further, Kelley’s Blue Book can also help estimate an old vehicle’s value. So, before renewal, customers must take the time to review the coverage to ensure there is no change in their insurance needs.

7. Make the most of low mileage discounts

A few companies provide discounts for drivers who drive a below-average number of miles in a year. These discounts also apply to drivers who carpool to work.

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