Top 5 Ways to Save Money on Auto Insurance
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Do you know the top 5 ways to save money on auto insurance? If not, then this blog post is for you! With these tips, you will be able to save a significant amount of money each month without having any negative effects.
Auto insurance is one of those must-haves in life. In most states, it is required by law that you carry at least the minimum coverage. There’s no way around this, so you might as well take advantage of the money-saving tips below to make the most of your insurance experience.
Top 5 Ways to Save Money on Auto Insurance
Financial experts recommend reviewing your car, home, and life insurance policies every year to ensure you are getting the best coverage, for the lowest price.
When was the last time you compared your insurance policies?
Tip Number One: Consider Your Vehicle’s Value
Let’s face it, automobiles depreciate (or lose value) very quickly. When you drive your vehicle from the car lot brand new, the “new” value goes down suddenly to a “used” value. No matter how well you take care of your car, the value will decrease tremendously over a short period of time.
If you’ve paid off all debts owed on your vehicle, find out from your previous lender the estimated book value. If this amount equals the same or less than what your collision insurance premium is going to cost you, then there’s no reason to carry collision coverage.
You would basically be paying the total value of your car each year, whether you have an accident or not. You can save tremendously on your auto insurance premium by leaving off the collision if this is the case with your vehicle.
Tip Number Two: Avoid Traffic Tickets
Speeding tickets or moving violations are the number one cause of high insurance rates. When you drive at high speeds or disregard traffic rules, you are considered an “at-risk” driver, and your insurance rates are raised for several years as a result. Driving safely and following the rules of the road will keep your insurance rates at a low and enjoyable amount.
Tip Number Three: Know Your Coverage
There is some coverage that may not be necessary, depending on where you live or the type of vehicle you own. For example, if you live in a large city where auto theft is common, then theft insurance coverage might be wise. However, if you live forty miles from the nearest town on a high mountain where theft is very rare, then there’s no need to pay the additional premium for this type of coverage.
Know your coverage needs to really save money on auto insurance. Make sure you have the right amount of liability. If you’re paying for collision and comprehensive, then there’s no reason to carry the other two coverages if they don’t apply to you.
There are many coverages that are optional, but still helpful. You’ll need to carefully examine each coverage to decide if it’s needful or not. If your insurance company offers you “full coverage”, find out exactly what’s included. It might be cheaper to pay for only a few of the options separately if you don’t need all of the included coverage. This will depend on your needs, car value, etc.
If you’ve paid off all debts owed on your vehicle, find out from your previous lender the estimated book value. If this amount equals the same or less than what your collision insurance premium is going to cost you, then there’s no reason to carry collision coverage. You would basically be paying the total value of your car each year, whether you have an accident or not. You can save tremendously by leaving off the collision if this is true with your vehicle.
Tip Number Four: Auto Insurance Deductibles
Although high deductibles often get a negative response from consumers, they can actually work to your advantage and save you tons of premium money each year. The concept behind a deductible is to place more of the responsibility on the driver and less on the insurance company. In turn, your premium can be substantially less each year.
A $1,000 deductible amount seems extremely high, but if it saves you $200 per year on your insurance premium, it’s well worth it! Keep in mind that the deductible will be due only if you do have an accident where insurance is needed. Otherwise, you get to enjoy the lower premiums year after year.
If you select a policy with a high deductible, you might want to put some of your premium savings into an emergency fund, so you’ll have some or most of your deductible if an accident does occur.
Tip Number Five: Insurance Comparisons
Another way to save money is to make comparisons before signing on for insurance. You’ll not only want to compare policy options, but also insurance companies and pricing.
Note of Warning: Be careful not to sign up too quickly if a very low price is being offered. Get some references if possible, or ask around to find out if someone else has had experience with the company. Some companies who boast low prices offer the worst customer service, and take a very long time to process claims, so use caution at all times.
Bonus Tip: Go for discounts to save money on auto insurance!
Discounts can be found in many different places. Some of the more popular ones are AAA, driving safety courses, and good driver discounts for those that have been accident-free for a specified period of time. Be sure to check with your insurance company to see what discounted rates they offer!
For example, I saved $40 per month by taking an online defensive driving course as opposed to paying the full cost at my local DMV office. The results were immediate and I recommend it for everyone!
You can also contact your agent about getting a discount just by bundling them together with parts or home services so one bill per month covers all three types of protection; this will help save time as well as money! It is important that you know what type of car it is since some cars are not eligible for certain discounts like low mileage drivers or good students who maintain at least a B average. The last thing we want is an accident costing us more than just damage to the car!
When choosing an insurance company and selecting your coverage, use these simple tips to save money on the premium while also getting a great plan to meet your needs.
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