6 Ways to Save on Your Car Insurance

6 Ways to Save on Your Car Insurance

Car insurance is a necessary evil. No one likes paying for it – until they need it. Whether you’re broken down on the side of the road or just got rear-ended by another driver, you appreciate your insurance coverage when you need it most.

But good insurance doesn’t have to cost you a small fortune. Here are five ways to save on your premiums.

1. Ditch Coverage You Don’t Need

Take a closer look at your coverage, and drop insurance that you don’t need. If you’re driving an old car, you can drop collision and comprehensive coverage to enjoy low car insurance rates.

Collision and comprehensive coverage are required if you’re still making payments on your car, and is generally only useful for newer vehicles. Collision coverage pays to repair your vehicle if it crashes into another object or vehicle, or it flips over. Comprehensive coverage will pay for damages if your vehicle is stolen or damaged by a natural event, such as a storm or animal, or vandalism.

2. Take Advantage of Discounts

Every car insurance company offers discounts to drivers, so find out which ones your carrier offers. Common discounts include:

  •         Accident-free
  •         Affinity to an organization
  •         Paperless
  •         Good student
  •         Combining multiple policies (home, car, etc.)
  •         New vehicle
  •         Multi-car

Every carrier has its own list of discounts, so contact an agent to find out which ones are available and how you can save. You may need to provide documentation to receive certain discounts.

3. Improve Your Credit

Credit is an important factor when calculating your premium. Depending on your location, your credit score may be an even bigger factor than your driving record when it comes to premium costs.

In fact, Consumer Reports found that in Virginia, poor credit can lead to you paying $1,513 more on your annual premiums.

If your credit is less than stellar, taking steps to improve it can help you save on your insurance.

  •         Pay your bills, loans and credit cards on time
  •         Only open new credit accounts when necessary
  •         Keep your balances well below your credit limits

4. Shop Around

The simplest way to save on your car insurance is to shop around. Gather quotes from multiple insurance companies, and compare policies and rates.

Make sure that you’re comparing similar policies with similar coverage.

Try comparing rates every year to see which insurer offers the best one. Also, inquire about discounts offered by each carrier when comparing rates.

5. Consider a Usage-Based Policy

If you don’t drive often, you might consider an insurance company that offers a usage-based driving program. With these types of policies, the premiums are based on how much you drive and, sometimes, how well you drive.

In order to enroll in one of these programs, you’d need to install a small device into your vehicle that transmits data to the insurance company.

Esurance and MetroMile both now offer pay-per-mile insurance coverage.

6. Consider Your Vehicle

If you’re in the market for your next vehicle, consider checking insurance rates before you buy. The vehicle you drive will affect your premium, especially if you purchase collision and comprehensive coverage.

Moderately-priced and safe vehicles are generally cheaper to insure than expensive cars.

Filed under: Life

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