While shopping for car insurance, you might have noticed that there are a lot of factors insurers take into account before estimating a policy premium. Some of these factors likely to influence your rate and are sadly out of your hands. These factors include a record of prior claims, your gender and your age. Despite these fixed factors, there’s a lot you can do to lower your rates. After all, the choices we make have more influence than we may think. Here are a few tips that can positively influence your auto premiums.
Before You Buy Your Car
The year, make and model of your car all have a profound effect on your insurance premium. With everything else equal, a new, sporty or expensive car will cost more than the cheaper, older and average car, says Money Advice Service. However, there may be an enormous discrepancy even when you compare cars of the same value. If you have a shortlist of a few models, get in touch with your insurance provider and find out the rate each car attracts. Doing this will help you find a great deal that offers you savings when it comes to paying your premium.
If your older car has collision and comprehensive coverage, you will find yourself paying a premium that is more than the car’s value. To determine the actual value of the premium you are about to pay, add up all your collision and compensation payments. Multiply the resulting figure by 10 and if your car is worth less than that figure, do not buy the coverage.
Most carriers offer their policyholders discounts when their mileage is lower than the norm. These are known as low-mileage discounts. Maybe you are taking up a short commute or participating in your office carpool. Whatever the case, low mileage will score you a reduced rate from some insurance companies, so be sure to find out about available discounts. According to the DMV, some of the other discounts you should be on the lookout for include:
- Group insurance discount: Some companies offer discounts to car owners who are members of certain professions or organizations, such as teachers, engineers or veterans. Ask the car insurance company to furnish you with a list of groups to see if you qualify – a surprise may be waiting for you.
- Policy discounts: Car insurance companies sometimes give discounts to drivers who bundle multiple policies, such as auto and home or even just multiple vehicle policies.
- Driver discounts: Drivers who pose less of a financial risk get various discounts. Such discounts are targeted at individuals who are safe drivers; take defensive driving and driver education courses; are members of an auto club; have a low-risk occupation; or drive few miles a year.
- Alarm or anti-theft discount: Many auto insurance companies recognize that your vehicle is less likely to be stolen if you have an anti-theft device installed. Check to see if your insurance company has an alarm or anti-theft discount and consider if the price is worth the added premium savings over the years. If you have a factory-installed and approved alarm system in your car, insurance companies will not hesitate to positively factor it into your rate.
However, some companies that offer the highest discounts also have the highest premiums. So don’t get blinded by what you perceive as big savings. At the end of the day, you could still end up paying more.
Avoid Coverage Lapses
Even that brief lapse in your coverage may disqualify you from receiving any discounts. According to Financial Web, your premium rates may be increased by up to 40 percent when you renew your coverage. Late premium payments may also have an effect on your overall credit rating history, which can severely affect your chances of securing credit cards and loans. To avoid this situation, always make your payments on time.
Compare Quotes Before You Commit
Auto insurance company prices are different, and it’s always beneficial to shop around. You may easily end up paying double what you would pay another firm. Several independent web sites are offering online tools that help you find auto insurance companies quickly and thoroughly. For example, CoverHound helps you compare several auto insurance quotes based on your ZIP code, the number of vehicles, number of drivers, insurance status, home ownership status and marital status. Use the process of elimination to come up with a list of three or four reputable auto insurance companies. You can call each of them and ask them to answer the question, “How much auto insurance do I need?” Use their answers to evaluate the company’s ability to serve your needs, and then identify one that offers you a quote within your budget.
Are you ready to start saving on your premium? A little research will save you big in the long run. Remember to re-evaluate your car insurance policy annually as your changing circumstances and outside insurance competition are other chances to reduce your premium. Now that you know what you need and how to look for savings, start comparing the rates offered by insurance providers today.